Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS BILL (By Order)

Order for Third Reading read.

To be read the Third lime upon Thursday 26 February.

GREATER LONDON COUNCIL (GENERAL POWERS) (No. 2) Bill (BY ORDER)

Order for consideration, as amended, read.

To be considered upon Wednesday 25 February at Seven o'clock.

BRITISH RAILWAYS (NO. 2) BILL (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday 26 February.

BRITISH RAILWAYS (PENSION SCHEMES) BILL (By Order)

Read a Second time and committed.

BRITISH TRANSPORT DOCKS BILL (By Order)

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)

LLOYD'S BILL (By Order)

Orders for Second Reading read.

To be read a Second time upon Thursday 26 February.

LONDON TRANSPORT BILL (By Order)

Order for Second Reading read.

To be read a Second time upon Tuesday 24 February.

LLOYDS BANK BILL

Read a Second time and referred to the Examiners of Petitions for Private Bills.

Oral Answers to Questions — Agriculture, Fisheries and Food

Agricultural and Glasshouse Production

Mr. Pollock: asked the Minister of Agriculture, Fisheries and Food what progress is being made in the harmonisation of energy costs for horticultural and glasshouse production amongst countries of the European Economic Community.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Jerry Wiggin): I am not aware of any current move among the countries of the European Economic Community to harmonise energy costs in horticulture.

Mr. Pollock: Given that the question of artificially low Dutch gas prices will not be resolved by the European Court for some time, will my hon. Friend confirm that our Government are prepared to take positive action to ensure the survival of our horticulture industry through the 1981 season? Will the Government consider some form of national assistance similar to that being given by the French, Belgian and German Governments to home growers?

Mr. Wiggin: The Commission issued a formal warning to the Dutch Government on 7 November and stated that it would take action in the European Court of Justice unless a satisfactory response was made within six weeks. I understand that the Dutch Government's reply is being considered by the Commission. I can assure my hon. Friend that this matter will be raised at the next meeting of Agriculture Ministers and that my right hon. Friend will press the case. We believe that that is the right way of dealing with the matter.

Fishing Industry

Mr. Wall: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the present state of the fishing industry.

Sir Albert Costain: asked the Minister of Agriculture, Fisheries and Food what progress has been made in considering measures to restore confidence in the future of fishing.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): My right hon. Friend and I met representatives of the fishing industry on Tuesday this week at our request to receive information from them about the present financial situation in the industry. We also agreed the membership of the joint team of industry representatives and officials which is to investigate allegations about unfair and illegal imports.

Mr. Wall: I congratulate my hon. Friend on the immediate action that he has taken in consultation with the industry. Can he say whether equal immediate action will be taken to provide temporary financial help? What is being done in the EEC and in Britain to prevent the dumping of cheap fish on our market?

Mr. Buchanan-Smith: The alleged dumping is a matter for investigation. The team is expected to meet


early next week. We look forward to receiving its report as soon as possible. Representatives of the industry presented their case for financial aid to us on Tuesday. The documentary evidence was presented to us only on Tuesday, although we received one paper on Monday. We are analysing the evidence and as soon as we have done so we shall discuss the matter further with the industry.

Sir Albert Costain: Is the Minister aware that a recent edition of Fishing News indicated that he was prepared to stand out for a 12-mile limit from Flamborough Head to the North Foreland? Will he confirm that he is equally determined to do that for the South Coast of England?

Mr. Buchanan-Smith: Unfortunately, as my hon. Friend knows, no conclusion has yet been reached on a common fisheries" policy. Access is one of the issues central to the policy. The Government believe that we need an adequate zone of exclusive access. Equally, however, we must consider matters of historic rights where they are vital to other countries.

Mr. John Home Robertson: Is the Minister aware of the growing despair in the industry and the appalling number of redundancies now being created in the fish processing industry? What initiative does he intend to take to give fishermen the confidence to return to sea?

Mr. Buchanan-Smith: I am surprised that the hon. Gentleman is not aware of the initiative that the Government have taken. In addition to the £17 million of aid that we gave last year, we brought forward the review of the industry's finances, which was to take place at the end of March. The first review neeting took place at the Government's request during the earlier part of the week. I am sorry that the hon. Gentleman did not listen to my original reply.

Mr. Home Robertson: They are still on strike.

Mr. Buchanan-Smith: I regret that the fishermen are still on strike. The hon. Gentleman sounds almost as if he takes pleasure from it. I hope that he knows that the fishermen who are remaining in port are doing so against the advice of their own leaders.

Mr. Donald Stewart: Is it not the case that, whatever historic rights existed hitherto, the whole thing, to use the common phrase, is now up for grabs? Whatever the Minister is prepared to concede, should not at least he and his right hon. Friend stand out for a 12-mile exclusive limit for United Kingdom fishermen?

Mr. Buchanan-Smith: In the negotiations in Brussels, which have not yet reached a conclusion, we always consult the representatives of the fishing industry who are with us. We shall continue to do so in the forthcoming negotiations.

Mr. Sproat: Is my hon. Friend aware that the situation is growing more desperate day by day in all parts of the fishing industry in the North-East of Scotland? Is he aware that fish processers have already had to lay off about 500 men this week? If positive action is not taken quickly, that could run into thousands. Is he aware that fish merchants are being told that if they cannot meet their supplies next week major contracts will have to be cancelled and will be sent abroad? Will my hon. Friend give us the names of those who will serve on the committee to investigate allegations of fish dumping?

Mr. Buchanan-Smith: The Government have already taken action on two fronts. First, they have brought forward a review of the industry's finances. Secondly, they have set up the team of representatives of the industry and officials to investigate allegations about imports. We have asked for nominations from the three main fishing organisations, two nominations from producer organisations and one from Northern Ireland. The Department is ready to start work on the investigation immediately.
I acknowledge the problem that is facing processers. I hope that the fishermen who are not going to sea will bear in mind the wider interests of the industry—for example, processers and those employed in processing firms—as well as their own interests.

Mr. Strang: Is the hon. Gentleman aware that neither my hon. Friend the Member for Berwick and East Lothian (Mr. Robertson) nor I take any pleasure from the continued action by some fishermen in Scottish ports? Is he further aware that, although we welcome the setting up of the anti-fish dumping committee, we think that the committee is no substitute for Government action to tackle the crisis in the industry? Has he studied the figures published this morning by Associated Fisheries, which detail the effect of the reduced catch on fish processing? How many more hundreds of jobs will be lost in the industry before the Government take action? May we have a statement next week?

Mr. Buchanan-Smith: I think that the hon. Gentleman has recognised the substantial aid that the Government have given to the industry. Secondly, the Government have responded immediately to the industry's economic plight. I am aware of the difficulties that are being faced. I am grateful to the hon. Gentleman for acknowledging the problem of the fishermen staying in the port. I ask him to realise that it was only on Tuesday that we received the fishermen's final representations. We have agreed to deal with them urgently. It is significant that the leaders of the industry have accepted the Government's assurances.

Several Hon. Members rose—

Mr. Speaker: Order. This issue arises again on question No. 4.

Beef Production

Mr. Iain Mills: asked the Minister of Agriculture, Fisheries and Food what he expects will be the change in the level of beef production in the coming marketing year.

Mr. Buchanan-Smith: Under present trends I expect beef production to be somewhat lower in the coming year.

Mr. Mills: I am sure that my hon. Friend will join me in being worried about the fact that this is the sixth successive year when there has been a drop in beef production. Will he consider urgently those of my West Midland and Warwickshire farmers who consider that a realistic settlement for farm prices, the need to maintain the green pound and a further reduction in interest rates should form part of his negotiations in the near future?

Mr. Buchanan-Smith: I acknowledge what my hon. Friend says. The White Paper indiccated that agricultural incomes declined during the past year. The figures for the beef sector gave us especial cause for concern. I give my hon. Friend the assurance that in the price review negotiations we shall need to examine carefully what is


happening in that sector. That applies to livestock generally, but particularly to beef. We acknowledge that matters are difficult.

Mr. Wm. Ross: Is the Minister aware that in my part of the United Kingdom beef prices are consistently a long way below the level of prices that persists elsewhere? What changes does he propoes to make in the beef marketing system so that a more unified pricing arrangement will be arrived at throughout the United Kingdom.

Mr. Buchanan-Smith: Beef prices must be negotiated in the coming price review with our European colleagues. I acknowledge that even greater difficulties are faced by Northern Ireland producers. However, through intervention, the beef premium scheme, the suckler cow subsidy and hill livestock compensatory amounts, large sums are being paid into the beef industry. I acknowledge that there are problems, but we shall be dealing with them.

Sir Timothy Kitson: Is my hon. Friend aware that large numbers of Irish store cattle that would normally find their way on to the British market are now being exported direct to Libya and attracting large headage payments? Will he examine the difficulty that this trade is causing to beef farmers in the North of England, with a view to ascertaining whether anything can be done to put matters right?

Mr. Buchanan-Smith: Yes. I willingly give my hon. Friend that assurance.

Mr. Colin Shepherd: Will my hon. Friend confirm that the variable premium scheme will continue to be the main price support mechanism for the coming year?

Mr. Buchanan-Smith: We believe that it should be. We consider it to be a good investment in terms of funds. It is good for the consumer as well as for the producer.

Common Fisheries Policy

Mr. Myles: asked the Minister of Agriculture, Fisheries and Food what discussions he has had with representatives of the United Kingdom fishing industries on a common fisheries policy.

Mr. Buchanan-Smith: On 4 February in London and again during the meeting of the Fisheries Council in Brussels on 9 to 11 February.

Mr. Myles: Will my right hon. and hon. Friends do all that they can to promote unity within the United Kingdom fishing industry—unity with the catchers, the salesmen, the wholesalers, the processers, the retailers and, indeed, the consumers, so that we may have a strong, united industry to get a better agreement in Brussels?

Mr. Buchanan-Smith: My hon. Friend is right. One of the strengths of Ministers in both the last Labour Government and this Government in the negotiations in Europe has been to have a united industry behind them. That relates to uniting not only the sections of the catching industry but the entire industry.

Mr. James Lamond: Although fishermen cannot make a living because of the poor prices that they receive at the quayside and because of the flood of cheap imported fish, how is it that the consumer cannot discern any reduction in the price of fish in the shop?

Mr. Buchanan-Smith: I understand that in some areas there have been reductions in the price of fish. I remind the hon. Gentleman that my right hon. Friend has asked three of his marketing advisers to examine fish marketing. I look forward to whatever recommendations they may make. The hon. Gentleman has touched on a serious issue.

Mr. McQuarrie: While I am sure that the House will continue to support my right hon. and hon. Friends in the efforts that the Government are making to reach agreement on the common fisheries policy, may I ask at what stage the Government will give some thought to a form of unilateral action if we cannot persuade our partners in Europe to come to a decision? Does my hon. Friend agree that the French Government are opposed to a solution?

Mr. Buchanan-Smith: I am sure that it has not escaped my hon. Friend's notice that, unlike 18 months ago, the United Kingdom's case for a properly renegotiated fisheries policy has received support from a wide range of Governments in Europe. That is a change from the: position a number of years ago. Let us pursue that course towards a proper policy. If that is not possible we shall consider the position further.

Mr. Henderson: In view of the problem on imports, has my hon. Friend considered the possibility of introducing a blue pound to help to deal with the exchange rate and the fact that prices, although disastrous for the fishermen, are higher than in continental ports?

Mr. Buchanan-Smith: We have to approach the question of prices in the Community through the existing mechanism. As my hon. Friend knows, there is a system of minimum withdrawal prices. I believe that that level of prices is unrealistic. We have made that view clear in the Community. We shall work to improve that and to improve the reference price system which governs the price at which imports come in from third countries.

Milk (Cessation Payments)

Miss Joan Lestor: asked the Minister of Agriculture, Fisheries and Food how much money has been paid out by the European Economic Community in the last three years to British farmers to enable them to cease producing milk.

The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): Payments by the European Community to dairy farmers in the United Kingdom under the non-marketing and conversion premium scheme amounted to £47·9 million in the years 1978–80.
The non-marketing section of the scheme has now closed to new applicants and the conversion section is expected to do so on 31 March 1981.

Miss Lestor: Bearing in mind the confusion that no doubt exists in the minds of many people who see the price of their milk constantly rising, and then read those figures, will the Minister say whether an examination has ever been carried out into the number of people who received EEC grants to start producing milk, then received grants to stop producing milk, and then received further grants to switch to something else? Is the Minister aware that my examination of this is profound?

Mr. Walker: Studies have been made. In the main, there are few cases of that happening. That is the reason why the Government supported the ending of the schemes, which were started by a previous Administration.

Mr. Lyell: Is it not the case that while the EEC has been making payments to farmers to stop producing milk, the French Government have recently made an enormous payment of £400 million to French farmers to encourage them to continue producing dairy products? Is that not an abuse of EEC rules'? Will my right hon. Friend comment on that?

Mr. Walker: Yes, Sir. As a result of inquiries about recent French aid to the dairy sector the Commission is taking action against the French Government.

Mr. Strang: Does the Minister agree that the cost of the EEC milk regime, now running at £2,400 million per annum, is monstrous? Does he agree that the proposed Commission's price increase, announced this morning, of a two-stage 8 per cent. increase in the price of milk is both an affront to the British people and economic lunacy? Will the Minister fight to hold down the cost of the common agricultural policy to the British people and oppose the ridiculous price increases?

Mr. Walker: As the hon. Gentleman will know, the Government have done rather better at holding down price increases than the Government of which he was a member, under whom the average price increase was 7½ per cent. per annum. I gather that that is the average price increase suggested in the proposal. The Commission's proposals advocate price increases equal to the average that the Labour Government agreed to year after year.

Mr. Moate: Does my right hon. Friend still wish to see an expansion of the United Kingdom dairy production?

Mr. Walker: Yes, but it must be based on improving our performance in manufactured products. There is little, if any, scope for increasing consumption of liquid milk because it is already above the average consumption of any other country in the world. Therefore, production depends on improving the manufacturing and processing side. Our efforts in marketing and the current benefit of positive MCAs are having a helpful effect.

Loans

Mr. Kenneth Lewis: asked the Minister of Agriculture, Fisheries and Food whether he will seek to set up a special agricultural loans board to make finance more easily and cheaply available to farmers.

Mr. Wiggin: No, Sir. Farmers' organisations have always supported our system of capital grants in preference to other forms of support such as subsidised loans.

Mr. Lewis: Does my hon. Friend agree that during the past two years fanners have found that there has been a considerable reduction in their income simply because of the high cost of borrowing due to the level of the minimum lending rate? Is my hon. Friend aware that if the farmers took a leaf out of the book of the miners and went on strike there would be no food and the miners would have to eat their coal instead of burning it? When the Chancellor provides special facilities for small businesses in the Budget, will my hon. Friend ask him to consider cutting in the farmers on that because, although their farms are worth a great deal of money, many are small businesses facing a difficult time with the high cost of borrowing money and of farm machinery?

Mr. Wiggin: I shall not get involved in arguing the merits of different sections of the community. I am sure that my hon. Friend will join me in saying that our farmers have nothing to be ashamed of about their productivity since the war years. Of course, they have had to bear the burden of high interest rates, but my right hon. and learned Friend the Chancellor has dropped the minimum lending rate by 3 percentage points since the middle of the summer. It is his firm intention to make further reductions as soon as the monetary conditions and prospects allow that. The issue in the original question is one of method. I hope that my hon. Friend accepts that the farmers' organisations approve of what the Government are doing.

Mr. Geraint Howells: Will the Minister consider setting up a land bank so that financial aid can be given to young entrants?

Mr. Wiggin: As I said in my original answer, that is not the Government's intention. The fanner's organisations believe that the method of paying grant, which has been going on for many years under all Governments, is satisfactory. We do not close our minds to changes but we have no plans to alter the method at present.

Mrs. Kellett-Bowman: Is my hon. Friend aware that his answer about the farmers preferring a grant to a loan was not borne out at the recent National Farmers Union general meeting? Will my hon. Friend comment on the Barclays Bank booklet—

Mr. William Hamilton: Reading.

Mrs. Kellett-Bowman: Only the title. The booklet is called "Farm Finance in the EEC", a copy of which has been sent to my hon. Friend. Will he comment on the unfair combination of grant and cheap credit that is available to the French, the Germans and the Dutch, and which is crucifying our farmers?

Mr. Wiggin: As my right hon. Friend said earlier, he has made that point to the Commission, which is investigating the matter. It is being dealt with in the way in which the EEC provisions allow. The question concerns the method of assistance. As I said in my last answer, we are prepared to look at changes, but when different methods are examined there are considerable benefits in capital grants because those who do not borrow can benefit as well as those who do.

Mr. John Home Robertson: Does the Minister agree that one useful way of reducing the credit crisis in agriculture is to encourage the industry to employ more youngsters as apprentices through the auspices of the Government's special employment schemes? Will he discuss that idea with his right hon. Friend?

Mr. Wiggin: I understand from a considerable number of my farmer friends that they are taking advantage of the excellent schemes that the Government are producing to help young people with employment.

Sugar

Mr. Nicholas Winterton: asked the Minister of Agriculture, Fisheries and Food what is the value and weight of sugar currently held in stockpiles in European Economic Community countries.

Mr. Peter Walker: No sugar is currently held in public intervention stores anywhere in the Community.

Mr. Winterton: The whole House will welcome that statement. I welcome it warmly. Does my right hon. Friend accept that the European Community and the United Kingdom historically have a responsibility to certain under-developed parts of the world? Are we not reducing the amount of cane sugar coming to Britain—

Mr. Peter Mills: No.

Mr. Winterton: Indeed we are. In doing so, are we not jeopardising the economy of many developing countries and, as we have heard in many debates, placing good workers in the North-West of England out of work?

Mr. Walker: I knew the delight with which my hon. Friend would greet my answer to his question. On the question of the cane sugar contracts traditionally placed in Britain, I am sure that he will welcome the announcement by Tate and Lyle that it has offered contracts for a further five years, and in the same volume, to all the countries mentioned by my hon. Friend.

Mr. Hawkins: Can my right hon. Friend assure the sugar beet industry that the Government are fully committed to a prosperous beet industry—bringing money to rural areas, both for the haulage industry and for farmers—without which the rural communities would suffer greatly?

Mr. Walker: I am well aware of the problems of the sugar beet industry. I regret the announcement this week of a number of closures. As my hon. Friend knows, I decided nearly two years ago to reduce the application of the sugar beet quota by 200,000 tonnes—as opposed to the quota we previously enjoyed—because that was in the interests of a tolerable balance in our market between cane and sugar beet. I have no intention of lowering the quota beyond that which I announced of 1·15 million tonnes.

Lime

Mr. John Home Robertson: asked the Minister of Agriculture, Fisheries and Food what steps he intends to take to increase the application of lime on farmland in England and Wales.

Mr. Wiggin: The application of lime qualifies for grant aid under the capital grant schemes when it is part of a grassland regeneration programme. Grants of up to 50 per cent. are available on hill land. We have no plans to introduce a further subsidy.

Mr. Home Robertson: Will the Minister give consideration to the reintroduction of a lime subsidy, especially for the less favoured areas of Britain? Is he aware that there is clear evidence of a major reduction in the use of lime in those areas, which is increasing soil acidity, and could cause long-term damage? Is he further aware that farming in those areas has been especially badly hit by the collapse of farming income which has resulted from the Government's policies?

Mr. Wiggin: I share the hon. Gentleman's view that lime is an especially valuable fertiliser. I deplore the drop in its use, especially in Scotland. I do not know that it would be the best use of limited Government resources to give a subsidy to that cause, rather than to the many other attractive options. I cannot give him any assurances. He knows that the Government have done a great deal for the hill farmer, and it is on the hills that lime is most useful.

Produce (Marketing)

Mr. Richard Page: asked the Minister of Agriculture, Fisheries and Food what plans he has to improve the marketing of British agricultural produce.

Mr. Peter Walker: My marketing advisers have drawn my attention to many areas where there is a potential for improvement and I am pursuing these points with the interests concerned. I am following with interest the discussions within the industry on the possible need for a central body to encourage better marketing. I have instructed my Department, including the agricultural development and advisory service, to take full account of marketing considerations in all its work.

Mr. Page: I thank my hon. Friend for his reply, especially the commitment to a professional marketing service throughout the country. Does he agree that professional marketing is as important as producing the goods? Because of the wide and diverse nature of agricultural products, will he speed up the introduction of that body, bearing in mind the comments of one of his marketing advisers at the recent Oxford farmers union conference?

Mr. Walker: The result of the speech by one of my advisers is that a diversity of interests in food and agriculture have got together and formed a joint committee to consider the possibility of preventing unnecessary duplication and achieving a more effective use of their resources. I have made it clear that I should be interested to discuss the results of their conclusions.

European Community (Agricultural Policies)

Mr. Moate: asked the Minister of Agriculture, Fisheries and Food what steps he is taking to promote fundamental changes in the agricultural policies of the European Economic Community.

Mr. Peter Walker: I am continuing to press for action on prices and such other measures of reform of the common agricultural policy as are appropriate and negotiable.

Mr. Moate: Does my right hon. Friend agree that the phrase "fundamental reform" has been around for many years, and we have yet to see any results? Are the Government really determined, on this occasion, to secure a fundamental change in the CAP or a replacement of the current policy? Is it not right for him to tell the House of his ideas about how the CAP should be reformed, perhaps in the form of a Green Paper?

Mr. Walker: As my hon. Friend knows, during the past year there have been substantial reductions in the number of what used to be referred to as mountains and lakes. There has been a better administration of the disposal policy. The new proposal for a super levy to stop the increase in milk surpluses is radical and important. Those matters will be fully discussed, as is traditional, in a major debate prior to the negotiations on the CAP.

Mr. Strang: Will the Minister say in what year the Labour Government agreed to an average price increase of 7·5 per cent? His reply to my earlier question on the EEC prices package may have been somewhat misleading. Will he address himself to the real issue, namely the cost to the British taxpayer of the proposed prices package? Is


it a personal insult to the Prime Minister, or has he decided that the British taxpayers will make a contribution to the French President's election campaign?

Mr. Walker: I shall be delighted to table an official reply showing the list of price increases agreed by the Labour Government. I hope that the hon. Gentleman does not find that too embarrassing. During the past three years, the average increase of food prices under the CAP was 2·7 per cent. per year—way below the input costs and way below the rate of inflation in any country in Europe.

Mr. Marlow: As our friends on the Continent are providing heavy subsidies for their agriculture—both France and Germany through interest-reduced loans and subsidies—will my right hon. Friend consider, as a radical improvement in the CAP, that we should at once revalue the green pound by the full amount, and agree that at the same time a small proportion of that total amount of cost saving to the British consumer should be given as some subsidy to our farmers in view of their recent reduction in income?

Mr. Walker: I reject my hon. Friend's suggestion. Farm incomes in real terms have reduced by 24 per cent. during the past year. His suggestion would mean another massive reduction in farm incomes in Britain. I suggest that my hon. Friend carefully studies the reason why countries such as Germany have always struggled to maintain their positive MCAs. Germany did so because it considered it to be of benefit to the German economy.

Milk (Binder Hamlyn Reports)

Mr. Watson: asked the Minister of Agriculture, Fisheries and Food which organisations he is consulting on the recommendations of the two Binder Hamlyn reports on milk.

Mr. Peter Walker: Comments on both reports were invited from a range of interested organisations, including the dairy trade federations, the milk marketing boards, the farmers unions, the trades unions representing the workers in the dairy industry and the major consumer organisations.

Mr. Watson: When will my right hon. Friend be in a position to implement the proposals of the second Binder Hamlyn report?

Mr. Walker: I hope that we shall have completed discussions and drawn conclusions on what action should be taken within the coming month.

Mr. Lang: Does my right hon. Friend recognise that any undue delay could be harmful to the industry? Does he accept that there has been a serious drop in the income of milk producers—as evidenced by the recent agricultural review—which requires attention?

Mr. Walker: I agree that there has been a drop in the income of dairy producers. The Government can claim to have taken a number of steps to assist them during a period of considerable increases in input costs. The decisions set out in the Binder Hamlyn report are highly technical, and are important for the long-term future of the industry.

Potatoes

Mr. Michael Shaw: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the support that will be given for potato production in the coming season.

Mr. Buchanan-Smith: The guaranteed price for the 1981 crop will be announced shortly.

Mr. Shaw: Does my hon. Friend agree that there is a continued need to improve marketing in the industry, and especially to match production with the needs of the processers?

Mr. Buchanan-Smith: I wholly agree with my hon. Friend. I think that the views which he expressed were very much echoed by the report of my right hon. Friend's marketing advisers. That report is now being discussed between my Department and the Potato Marketing Board and producers generally. I hope that out of that we can get better marketing and in particular take into account the needs of the processers.

Mr. Peter Mills: Will the Minister bear in mind that the industry needs a good shake-up, and that it needs to wake up and move into the 1980s with modern processing and marketing? Will he make it clear to the industry that if it does not do that some of the processers will be forced to buy abroad, which would be wrong for this country?

Mr. Buchanan-Smith: Again, the points that my hon. Friend makes were borne out in the report to which I referred. Another aspect which I think is of particular importance is that we maintain a high quality potato, well presented. It is only if we do that that we can keep up the consumption of potatoes in this country.

Mr. Myles: Will my hon. Friend give every encouragement to the Scottish Seed Potato Association which is doing a bit for itself in seed potato marketing?

Mr. Buchanan-Smith: Although I have some responsibilities for potatoes, I am glad to say that they do not extend to Scottish seed potatoes, although I have a constituency interest. I shall draw the attention of my right hon. Friend the Secretary of State for Scotland to what my hon. Friend has said.

Sugar (ACP Imports)

Mr. Marlow: asked the Minister of Agriculture, Fisheries and Food if he will raise the matter of African, Caribbean and Pacific imports of sugar into the European Economic Community at the next meeting of Community Agriculture Ministers.

Mr. Peter Walker: No, Sir. These imports are fully safeguarded under the Lomé convention.

Mr. Marlow: As the price of sugar on the world market from ACP countries over the past four years, with the exception of last year, has been half the price of European Community sugar, will my right hon. Friend impress upon the Community that it would be far better if we could have guaranteed arrangements for a greater supply of sugar from those countries, with which we should wish to trade, rather than expensive sugar from other European countries?

Mr. Walker: The question asked was about an agreement willingly made and a figure agreed to by the


Lomé countries. My hon. Friend has just pointed out the immense advantage that the Lomé countries have had from the existence of a European sugar regime which in four of the last five years has brought them such benefit.

Dr. Mark Hughes: Does the right hon. Gentleman accept that, so long as the access of those countries to the European Community market is quantitatively limited, their ability to increase their production and sell it on the world market is also inhibited by the sale of surplus sugar with a taxpayers' subsidy on that same market?

Mr. Walker: Yes, Sir. That is why the British Government have always followed suggestions in the Community which would enable the Community to become a participant in the International Sugar Agreement under which these things could be properly regulated.

Sir William Clark: Can my right hon. Friend give the House some indication as to why the EEC has not yet joined the ISA? Can he say when he thinks that the EEC might join that agreement?

Mr. Walker: I hope that if agreement can be reached on sensible quota levels this year, what is now a Commission proposal to join the ISA will be supported by other countries. As my hon. Friend knows, it has always had the support of the United Kingdom.

Stocks of cereals held in Intervention in the European Community as at 31 January 1981



Tonnes



Wheat
Durum Wheat
Barley
Rye


Belgium
58,985
—
—
—


Denmark
58,948
—
13,521
62,081


France
2,653,790
500
73,609
2,134


Germany
1,634,205
—
459,917
442,916


Greece
—
—
—
—


Ireland
—
—
280
—


Italy
317,121
156,372
—
—


Luxembourg
2,615
—
—
5,481


Netherlands
37,213
—
—
—


United Kingdom
87,321
—
490,588
304



4,850,198
156,872
1,037,915
512,916

Food Prices

Mr. Dobson: asked the Minister of Agriculture, Fisheries and Food what proposals he has to reduce food prices.

Mr. Peter Walker: Since May 1979, retail food prices have already fallen significantly in relation to other retail prices and wages. In the forthcoming common agricultural policy price-fixing for 1981 I shall be pressing for price restraint and the continuation of other measures of benefit to the United Kingdom consumer.

Mr. Dobson: Does the Minister of Agriculture accept that his position is absolutely intolerable in that he is probably the first Minister of Agriculture to countenance the introduction of a tax on food since the abolition of the Corn Laws?

Mr. Walker: I am also the Minister of Agriculture who has halved the rate of increase in food prices under the present Government.

School Milk

Mr. Campbell-Savours: asked the Minister of Agriculture, Fisheries and Food if he is satisfied with

Mr. John Evans: Does the Minister accept that the ACP countries require trade more than aid, and that European farmers are capable of growing crops other than sugar beet? Does he agree that if we had additional imports of cane sugar this would provide work for the people of Merseyside in particular?

Mr. Walker: Yes, but that is why it must be a pleasure to those countries that want trade rather than aid to realise that in four out of the last five years they have had better prices than they would otherwise have had due to the Lomé agreements.

Cereals (Intervention Stock)

Mr. Peter Eraser: asked the Minister of Agriculture, Fisheries and Food what are the current holdings of cereals in intervention stocks in each of the countries of the European Economic Community.

Mr. Buchanan-Smith: With permission, Mr. Speaker, I shall circulate the information in the Official Report.

Mr. Fraser: I am grateful to my hon. Friend for that reply.

Following is the information:

developments that have taken place in take-up of European Economic Community aid to increase the availability of free school milk in schools in the United Kingdom.

Mr. Peter Walker: The Government would like to see the maximum use made of the Community subsidy on school milk in the United Kingdom, and have been discussing with the Commission the arrangements by which this can best be achieved. I hope that it will be possible to announce the details of these arrangements very shortly.

Mr. Campbell-Savours: Is the right hon. Gentleman aware of the great disquiet that exists in Cumbria about the lack of urgency in the Government's pursuit of this matter? Is he aware that farmers in Cumbria are now openly suggesting that the co-responsibility levy should be withheld?

Mr. Walker: As I stated in my reply, I think that the negotiations which have been held in detail between the industry, the education authorities and my Department, and also the Commission, are now near to completion and I believe that this will be of great assistance.

Prime Minister (Engagements)

Watson: asked the Prime Minister whether she will list her official engagements for Thursday 19 February.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today, including one with Mr. Christopher Tugendhat.

Mr. Watson: In view of the developments in the coal industry in the past 24 hours, will the Prime Minister take time today to confirm that the least efficient 10 per cent. of all British pits are currently losing money at the rate of £190 million per year, and that whatever may be the outcome of talks over the next few days, the most effective way of reducing the cost, and thereby restoring the competitiveness, of British coal lies in a planned and agreed schedule of pit closures?

The Prime Minister: I understand that those figures are broadly correct. I stress that it is the wish of us on this side of the House, and I believe on the other, to have a competitive coal industry because that puts the least burdens on other parts of the economy and would enable very many other industries which are big users of electricity, which is based on coal, to have that electricity more cheaply, and thereby to keep more jobs in their own industries.

Mr. Michael Foot: May I, a little more generously than the right hon. Lady's hon. Friend, congratulate the right hon. Lady on what, certainly on the present evidence, appears to be a great victory for the miners and for the nation? We shall, of course, wish to have explicit undertakings from the Minister who was so vague two days ago, but so far it looks like a very good thing. I assure the right hon. Lady that every time she turns she will get a nice bouquet from me. I might even ask her to dinner—who can tell? Are the Government thinking of including the specific undertakings given to the miners of financial support in a new coal industry Bill? When will that Bill be introduced, and what figure does she set upon the the amount that the Government will give to enable the undertakings that have been made to be carried through?

The Prime Minister: The right hon. Gentleman referred to dinners. Doubtless he will not need reminding that on occasion it is a lady's prerogative to say "No".

Mr. Ashton: Not to the miners.

The Prime Minister: That was precisely why I led in with my phrase relating to dinners. [Interruption.] I am not unaware of what the hon. Member for Bolsover (Mr. Skinner) was saying. I thought that he said "congratulations" as I came in.

Mr. Skinner: Not that.

The Prime Minister: Perhaps not. Such generosity would not become the hon. Gentleman.
The right hon. Gentleman asked about the amount of money. I must stick to what my right hon. Friend said at the meeting yesterday. Two main points were raised at that meeting. It would be quite wrong to put any gloss on them, because the matters will continue to be negotiated next

week. My right hon. Friend said that the Government were prepared to discuss the financial constraints with an open mind and also with a view to movement.
The chairman of the NCB said that, in the light of this, the board would withdraw its closure proposals and re-examine the position in consultation with the unions. I am not in a position to go any further. The consultations, discussions and negotiations will continue at the meeting next week, and there is nothing that I can usefully add.

Mr. Foot: I am eager to thank the right hon. Lady on every available occasion. I also thank her for turning yesterday's listening session into a talking session. That was an improvement as well. What would be worst of all would be if, after the Government had secured the apparent movement towards a settlement, there were to be any breach of faith—[HON. MEMBERS: "Question".] I am asking the same question to which I did not get an answer. What amount of money is involved? Will it be incorporated in a new coal industry Bill, because the last Coal Industry Act was part of the cause of the trouble?

The Prime Minister: It is precisely because there must be no breach of faith with what took place at the meeting that I have stuck to quoting the words that were heard and were the subject of the action taken at that meeting. Precisely for the reason given by the right hon. Gentleman, it would be most unwise to go any further when those words will be the subject of negotiation at the next meeting.

Mr. Fox: asked the Prime Minister if she will list her official engagements for Thursday 19 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Fox: I know that my right hon. Friend is as concerned as any Conservative Member at the recent dismissal of Miss Joanna Harris by the Sandwell council. Is she aware that this is only the tip of the iceberg in that a number of my constituents who are placed in the same position have now received instructions from the Labour-controlled Bradford metropolitan council that only trade unionists will be transferred in their jobs or promoted? Is that not a disgraceful state of affairs which borders on blackmail? These people have every right to expect Parliament to help them.

The Prime Minister: I share my hon. Friend's use of the word "disgraceful" to describe the reported activities of the Bradford council, saying that only people who joined unions would be considered for promotion. That is repugnant and disgraceful. I believe that the vast majority of people in this country, as well as those in trade unions, are against the closed shop.

Mr. Russell Kerr: Ask Jim Prior.

The Prime Minister: I have not looked at the particular agreement of the Bradford council, but it is quite possible that it might be in breach of the Employment Act. If so, I hope that action will be taken. The Green Paper on trade union immunities makes further legislative proposals with regard to the closed shop. I hope that people who have particular examples, or strong feelings on the subject, will contact my right hon. Friend the Secretary of State for Employment.

Dr. Owen: Why did the Prime Minister ignore the repeated explanations during all stages of the Coal


Industry Act that it was, in fact, a pit closure measure? Who are the trimmers now? Is this slow motion Conservatism or the first note of the Limehouse Blues?

The Prime Minister: The action was swift, decisive and realistic.

Mr. Lang: asked the Prime Minister if she will list her official engagements for Thursday 19 February.

The Prime Minister: I refer my hon. Friend to the reply which I gave some moments ago.

Mr. Lang: Will my right hon. Friend find time today to consider the good news from Scotland in the form of 1,000 new jobs in electronics at the Timex factory in Dundee? Does she agree that it is sensible to back such new growth industries as a means of helping to create a new industrial base in Scotland?

The Prime Minister: Yes. I think that my hon. Friend is probably referring to the new Sinclair development—

Mr. Cryer: Saved by the NEB.

The Prime Minister: —of the very small television sets which it is hoped to sell for about £50 each. I wish the project every success and agree that if we get the economic climate right these new growth industries will develop and provide jobs in Scotland and elsewhere in the country.

Mr. Barry Jones: Does the right hon. Lady feel any concern about the continuing level of steel imports, notwithstanding the depression? Is she aware that the remaining 2,000 jobs at BSC Shotton depend for the next fortnight on imported steel from Holland? What will she do about that crazy situation?

The Prime Minister: The hon. Gentleman must take up such matters with the BSC. He knows that it is in charge and that only it can deal with matters of that kind. If ever a Government have to answer every detailed question about every industry we shall cease to have a democracy in this country. There will—I hope next week—be a statement on the future of the BSC's plan

Mr. David Steel: While the Prime Minister is in her present constructive mood, will she turn her attention to lowering interest rates?

The Prime Minister: The right hon. Gentleman must realise that if mote money is to be found—perhaps the whole House will realise it—the only place from which it can come is the people of this country. It must either come out of the taxpayers' pocket or be borrowed, and that would lead to higher interest rates. When people constantly ask for more money, I hope that they will bear that in mind.

Parliamentary Questions

Q.5. Mr. Wilkinson: asked the Prime Minister whether, in view of the lack of substantive questions tabled

to her, she will seek to appoint a Select Committee to examine whether some form of priority could be established for those questions addressed to her requiring a substantive answer, above those requesting her to list her engagements for the day.

The Prime Minister: The arrangements for Prime Minister's questions have been reviewed twice by Select Committees in recent years, and I am not sure how much further progress we would make by appointing another Committee now. I am very willing to answer substantive questions if they are tabled, and I hope that hon. Members will take the opportunity to put down more of them.

Mr. Wilkinson: I appreciate my right hon. Friend's willingness to answer any question from virtually anyone, but does not she agree that the plethora of open questions is making a monkey of our business? While we need a balance between admirable, spontaneous questions such as that from my hon. Friend the Member for Shipley (Mr. Fox), we also need some specific questions to balance the Order Paper in respect of Prime Minister's Question Time.

The Prime Minister: I have never transferred a single oral question which has been put to me. I am wholly in favour of what my hon. Friend is saying. Substantive questions are the easiest to answer.

Mr. Whitehead: Has the Prime Minister seen the announcement today of new editors for Times Newspapers Limited—The Times and The Sunday Times?—

Mr. Speaker: Order. This is not an open question.

Mr. Harry Ewing: If the Prime Minister is not in favour of setting up a Committee to examine Prime Minister's questions, can she set up a Committee to examine Prime Minister's answers? Is the right hon. Lady aware that the answer that she has given to the hon. Member for Galloway (Mr. Lang) regarding the new jobs in Scotland is without foundation? Is she aware that a company is taking over people who are in jobs at present? It is wrong to mislead the House and to pretend that those are new jobs when they are existing jobs.

The Prime Minister: No one can be sure that a particular job will exist in X years' time. It is impossible to be sure. Many jobs now are concerned with products which did not exist 10 years ago, let alone 20 years ago. Opposition Members will be aware that from 1964 to 1970, while the Labour Government were in power, the average annual number of closures in the pits was 40.

Mr. Hugh Dykes: On a point of order, Mr. Speaker. The hon. Member for Bootle (Mr. Roberts) seems to have had question number 1 or 2—

Mr. Speaker: Order. I hope that the hon. Gentleman has a real point of order for me.

Business of the House

Mr. Michael Foot: Will the Leader of the House state the business for next week?

The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): Yes, Sir. The business for next week will be as follows:
MONDAY 23 FEBRUARY—Second Reading of the Energy Conservation Bill [Lords].
TUESDAY 24 FEBRUARY—Second Reading of the Social Security Bill.
Motion on the European Communities (Medical, Dental and Nursing Professions) (Linguistic Knowledge) Order.
WEDNESDAY 25 FEBRUARY—Remaining stages of the Gas Levy Bill.
At 7 o'clock the Chairman of Ways and Means has named opposed private business for consideration.
THURSDAY 26 FEBRUARY—Supply [10th Allotted Day]: Until about 7 o'clock, debate on an Opposition motion on the crisis in the textile, clothing and footwear industries.
Debate on the rapidly deteriorating economic and employment situation in the South and South-West.
FRIDAY 27 FEBRUARY—Private Members' Bills.
MONDAY 2 MARCH—Second Reading of the Contempt of Court Bill [Lords].

Mr. Foot: A few minutes ago the Prime Minister referred to the possibility of a statement on the steel industry next week. Is the right hon. Gentleman proposing to have a debate on that subject before we have that statement, or will the statement and the debate take place next week? As the right hon. Lady also referred to the Government's desire for swift and decisive action, may I ask whether we can have swift and decisive action on the crisis in the water industry? Will the right hon. Gentleman make a statement on that crisis today, tomorrow or at the beginning of next week? There is a real need for swift and decisive action on that matter.

Mr. Pym: There will be a statement on steel next week. A Bill will also be published. There will not be an opportunity for a debate before that statement. The Bill may provide an appropriate opportunity for a debate, but the next state of the process is a statement.
Negotiations are still taking place between the employers and the workers in the water industry. I am aware of the reported decision by workers in three areas of the country to endorse the union's decision. However, as the matter is still under negotiation, it is better that it is left at the moment. I shall convey the right hon. Gentleman's representations to my right hon. Friend.

Mr. Cranley Onslow: If my right hon. Friend is planning future business, will he bear in mind that there is little chance that the House of Commons will find time to deal with anything more ambitious about the Canadian constitution than a simple one-clause Bill to hand over the matter to the Canadians to settle? So that there is no misunderstanding on this matter, will he so advise those in Ottawa who are concerned with this question at this stage, rather than let the matter develop into a dreadful misunderstanding later?

Mr. Pym: The Canadian Parliament is engaged at the moment in a debate that may or may not lead to a request

to Her Majesty's Government. We must wait until that process and procedure are complete before we can take the matter further. Until that Parliament comes to a decision in its own right the matter is speculative. The Government are considering the possibilities of what migh result from one decision or another being taken in Ottawa.

Mr. James Hamilton: Bearing in mind the statement that has been made by the employers and the unions in the construction industry in Scotland, will the right hon. Gentleman try to arrange for a debate, this week or next week, not only on the United Kingdom but with particular emphasis on Scotland, where we have record unemployment? Does he agree that as the construction industry is a strong base for employment, even if we cannot obtain a release of public expenditure a debate would help to establish unanimity in the House?

Mr. Pym: I note what the hon. Gentleman says. The House had an opportunity of a debate on that industry on a United Kingdom basis. I doubt whether there will be time for a separate debate on that industry in Scotland. However, I take note of the request.

Mr. Nicholas Winterton: Do the Government intend to make a statement about the textile and clothing industry prior to the Opposition's Supply day debate next week, bearing in mind that the Prime Minister has received a telegram from the Textile Industry Support Campaign? It was hoped that the textile and clothing industry, which employs more people than the coal industry and many others put together, would receive the same sensitive approach from the Government as that which the coal industry is apparently about to receive.

Mr. Pym: The textile industry is extremely important, but it is not likely that a statement will be made before the debate next week.

Mr. David Winnick: Is there not a need for an early debate, so that we can see whether industrial militancy is the only way to force the Government to see sense and to save Britain from industrial devastation? In such a debate, would it not be useful if the remarks made by the right hon. Gentleman's immediate predecessor about unemployment and the Conservative Party were to be repeated on the Floor of the House?

Mr. Pym: Not next week, Sir.

Mr. R. A. McCrindle: In view of the widespread interest in the Scott report on index-linked pensions, can my right hon. Friend tell me whether, at the very least, we shall be having a Government reaction to the conclusion in that report, or, at the very best, there will be a debate on the principle?

Mr. Pym: There will be a debate in due course. The Government believe that it would be helpful and sensible for there to be a general public discussion of this important, controversial and difficult issue. I have no doubt that in due course we shall have to find time for a debate on this subject.

Mr. Dennis Skinner: Has the Leader of the House paid any attention to the need for a debate on a new coal industry borrowing Bill? Should not he plan that early, in view of all the dithering that has taken place in the last 10 days, arising out of the Coal Board's plan to shut the 23—and subsequently 63—pits? Now that the


Government have made a U-turn, would it not be sensible to get on with the job and tell the miners and the executive of the NUM precisely what their intentions are, so that we know how much money will be put in, and whether the aid will be phased over one, two or three years? All those things must be done. The Government should stop dithering and get on with the job of ensuring that the coal industry is maintained.

Mr. Pym: No, Sir. The right course is for the discussions to continue. At their conclusion, further statements may be required, but that remains to be seen.

Mr. James Hill: As the Select Committee on Industry and Trade is discussing the BL corporate plan, should we not have a debate on a policy for the car industry in the United Kingdom, rather than always considering supplementing only BL?

Mr. Pym: The matter was covered in the debate on the Industry Bill. I should not excite hope in my hon. Friend that in the near future there will be time for another debate on the motor industry, although I shall keep his request in mind.

Mr. David Penhaligon: Why do the Government continue to fail to find time to discuss the £15,000 million that they intend to spend on building 10 PWRs? Will the recent Select Committee report change their mind?

Mr. Pym: The Government will consider carefully the important report that has just been published and will in due course publish our considered reply. At that moment, we may be able to find an opportunity to debate the report.

Mr. John Stokes: Will my right hon. Friend consider dropping the Wildlife and Countryside Bill [Lords], in view of the amount of work going through the House and because it may prove more trouble than it is worth?

Mr. Pym: I have no such intention, at any rate at present.

Mr. Clinton Davis: Having regard to the emasculation of businesses and jobs all over the country, not least in my constituency, where yesterday Metal Box Limited announced substantial dismissals without prior consultation with the trade unions, will the right hon. Gentleman arrange for a statement to be made by the Secretary of State for Employment to the effect that he, like the Secretary of State for Energy, will engage in substantial listening exercises, which seem to be so profitable in the coal industry?

Mr. Pym: I doubt whether such a statement would be appropriate, but I shall convey the hon. Gentleman's remarks to my right hon. Friend.

Mr. Tony Marlow: as there has recently been a lot of diplomatic activity in the Middle East by Ministers and other hon. Members, as we have had the Venice declaration and the European initiative, and as the Israelis are creating even greater problems by their accelerated settlements policy, will my right hon. Friend allow a debate on foreign affairs, and particularly on the Middle East, so that the Israeli Government are left in no doubt about how we feel?

Mr. Pym: I am aware of the wish of the House to have a debate on foreign affairs, but it cannot be in the near

future. I should like to provide a day as soon as it can be arranged. At that stage we shall consider how to structure the debate. There is a variety of possible options. It is a question of meeting the wishes of the House.

Mr. James Callaghan: In the light of the reply of the Leader of the House on the Canadian situation, will he give an undertaking that there will be no departure from the precedents that a request from the Federal Parliament of Canada will be met in full by her Majesty's Government, with a favourable recommendation to the House?

Mr. Pym: It would not be appropriate for me to respond to that question, except to remind the right hon. Gentleman that on a number of a occasions the Prime Minister has answered points raised by the right hon. Gentleman on that issue. I have nothing further to add.

Several Hon. Members rose—

Mr. Speaker: Order. I propose to call three more hon. Members from either side, which should cater for all the hon. Members who are standing.

Mr. Nicholas Baker: As many of us are concerned about the loss of agricultural land, will my right hon. Friend consider, first, finding time for a debate on the subject and, secondly, the proposal that each Bill that comes before the House should show in its memorandum the amount of agricultural land that is likely to be lost as a result of the measure?

Mr. Pym: I shall bear the request in mind, but I cannot give my hon. Friend much hope that there will be time, at any rate in the near future.

Mr. Greville Janner: Will the House have the opportunity soon to debate the problems of short-time working? Is the right hon. Gentleman aware that in the city of Leicester, where we have—for us—record unemployment of nearly 10 per cent., a further 15 per cent. of our workers are not working full time? Does he accept that if we take that 25 per cent. figure as being fairly common it demonstrates that the disaster is growing and that the House should consider short-time working in addition to unemployment?

Mr. Pym: The subject is appropriate to be dealt with in any economic debate. There have been opportunities, and doubtless there will continue to be opportunities. It is unlikely that we shall have time to debate the matter on its own.

Mr. John Biggs-Davidson: Does my right hon. Friend agree that it does no service to the cause that the right hon. Member for Cardiff, South-East, (Mr. Callaghan) has in mind to suggest that the House has no option? Does he further agree that we have a duty to consider what may or may not be put before us?

Mr. Pym: I have nothing to add to what I said previously.

Mr. James Lamond: If there is to be no statement by the Government about the textile industry before the debate next Thursday, will the right hon. Gentleman at least ask the Minister to be prepared to answer the question that will be asked by hon. Members representing textile constituencies, which is why textile workers should patiently have to wait 20 years or more to have their case for import restrictions accepted, when the


Prime Minister has made a U-turn that would do justice to the Polish Government in the face of trade union solidarity by the mineworkers, who have at a stroke prevented the import of cheap coal?

Mr. Pym: Before the debate I shall convey to my right hon. Friend the essence of what the hon. Gentleman says.

Sir Bernard Braine: Having heard the suggestion that came surprisingly from the former Prime Minister, is my right hon. Friend aware that it would be gravely misjudging the mood of the House to ask us to approve and rubber-stamp the request, which would be totally unprecendented, without the full consent of the federal and provincial Governments of Canada? Will he take note that there is a strong feeling that that would not be tolerated in this sovereign Parliament?

Mr. Pym: I take note of what my hon. Friend says. The whole House is seized of the fact that were a request to be made by the Parliament in Ottawa we should face a situation of the utmost importance and, possibly, difficulty. We shall have to act—as I am sure we shall—in a highly responsible manner. However, it is not a matter to be pursued at present. It is still an open issue before the Canadian Parliament.

Several Hon. Members rose—

Mr. Speaker: Order. I shall call the hon. Member for Keighley (Mr. Cryer) after I have called the right hon. Member for Cardiff, South-East (Mr. Callaghan).

Mr. James Callaghan: In view of what is being said, should not the Government make a considered statement? Does the right hon. Gentleman accept that all I asked was —and he did not give a clear reply—that the Government should act in accordance with convention? The House must consider what is before it, and the House can make a fool of itself and turn it down. However, would it not

be in accordance with convention, if the Government received such a request, for them to place the legislation in front of the House, together with the recommendation that it should be passed?

Mr. Pym: The essential convention to which the right hon. Gentleman refers is a request from the Parliament of Canada. As he knows, that request has not yet been received. It cannot be said with certainty that it will be. A statement thereon would not, therefore, be appropriate and neither would it be welcome in the eyes of the federal Government of Canada. We have to wait until their proceedings are concluded. When they are concluded, if they send us a request, as the Prime Minister says, we shall have to deal with the matter.

Mr. Bob Cryer: I welcome the development of right hon. and hon. Members being called several times during business Questions, Mr. Speaker.

Mr. Speaker: Order. I undertake that when the hon. Gentleman has been Prime Minister I shall call him twice.

Mr. Cryer: I thought that we were all elected on the basis of equality. Will the Leader of the House say when we can expect a debate on defence? As he is acutely aware, there is a rising tide of opposition to the Government's policy. [HON. MEMBERS: "NO."] There may not be in this place, but there is outside. There is a rising tide of opposition to the Government's policy of implementing the installation of cruise missiles. That is why the Secretary of State, who is losing the argument, is about to mount a propaganda campaign. Will the Leader of the House bear in mind that the NUM is opposed to cruise missiles?

Mr. Pym: I do not think that the hon. Gentleman will have to wait long for a debate on the nuclear aspects of defence. It will not be many weeks before the White Paper is published and the normal annual debate takes place.

Coal Industry

The Secretary of State for Energy (Mr. David Howell): I will, with permission, make a statement.
As the House knows, there was a tripartite meeting of the coal industry yesterday. This had been called at the industry's request to discuss the situation which had arisen following the meeting in London on 10 February between the NCB and the unions. At that meeting the NCB had outlined its approach to the current problems facing the industry. It had put forward a four-point plan for bringing the supply and demand for coal back into balance, whilst maintaining investment for the future. The plan included an accelerated programme for the closure of older capacity approaching the end of its productive life. This was to be discussed in detail in the areas. The board believed its plan to be reasonable and acceptable. However, fears and anxiety among the work force arose through rumoured and distorted impressions of what was being proposed.
It was against this background that yesterday's meeting took place. At the meeting three main points were raised—closures, financial constraints and coal imports. I said that the Government were prepared to discuss the financial constraints with an open mind and also with a view to movement. The chairman of the National Coal Board said that in the light of this the board would withdraw its closure proposals and re-examine the position in consultation with the unions. I accordingly invited the industry to come forward with new proposals consistent with "Plan for Coal".
As regards imports, I pointed out that these would, in any case, fall this year from their 1980 levels. The industry representatives said that they wished to see this figure brought down to its irreducible minimum. I said that the Government would be prepared to look, with a view to movement, at what could be done to go in this direction.
I welcome the decision of the national executive committee of the NUM today and hope that its lead will be followed. I will be meeting the industry again next Wednesday.

Mr. Merlyn Rees: Are not the contents of this not very explicit statement a victory for common sense over political prejudice against the nationalised industries following a foolish decision on the financial constraints in the Coal Industry Act 1980, about which we warned the Secretary of State? His assumptions were wrong, were seen to be wrong and have proved to be wrong. The statement also follows a period of ministerial and Prime Ministerial ineptitude in the handling of events in recent weeks which enabled the miners, correctly, to claim victory.
In what ways will financial help be given? It is not enough for the statement to include words such as
the Government were prepared to discuss the financial constraints with an open mind and also with a view to movement".
What sort of financial help is being considered? Will there be grants for specific purposes? Will the social charges of the NCB be transferred to the Government? Will there be an increase in the cash limits, which are obviously insufficient? When may we expect legislation to enable the Government to act? The Opposition will expedite any legislation that is required for this purpose.
Despite the fact that on Tuesday I was informed that all parts of the coal industry wanted similar treatment on

imports to that followed in Western Europe, the Secretary of State will recall asking me whether I knew what I was talking about. Mr. Gormley, when he came out of the talks last night after a preliminary meeting—if that was a preliminary meeting, I wonder what will come out of later meetings—said that there was a commitment on lowering imports. What is the commitment? How will it be implemented?
I again offer advice which I hope the right hon. Gentleman, as he did last time, will accept. There are still miners who say that they are not going back to work. Will he make his statement more explicit? Much as I want them to go back, I have heard this morning that the outcome is far too general and that they do not trust the Government. These matters must be spelt out, or the situation will become extremely difficult.
More generally, does the right hon. Gentleman agree that on a day when gas prices are being jacked up by Government decision, the Government's overall energy pricing policy is even more in tatters than before and that the Government's industrial policy is unrecognisable compared with that put to the electorate? The Government have not engaged in a U-turn: they are like a truck in a skid. Government policy has jack-knifed.

Mr. Howell: The right hon. Gentleman has made a lengthy speech in which there are a number of substantial points that I should like to seek to answer.
The right hon. Gentleman speaks about financial constraints and the Coal Industry Act which was passed last year. It was always recognised by both sides of the industry and in "Plan for Coal" that closures were necessary to reduce old and declining capacity and to modernise new capacity. That was always seen as necessary. That was the recognised purpose of the Coal Industry Act.
The right hon. Gentleman asks whether new legislation will be needed. The answer is "No". It was made explicit in the Coal Industry Act that there was flexibility and room for changes. I hope that this answers the question on legislation.
The right hon. Gentleman asked whether I would be more specific on what he called financial help and lower imports. I have to tell him that the words I used in the tripartite meeting, which I set out and which I have set out again today before the House, were explicitly put to both sides of the industry. It was on the understanding of those words that the industry agreed to come back next Wednesday to talk further. It was on the understanding of those words that the chairman of the NCB said that, in the light of them, the board would withdraw its closure proposals and re-examine the position in consultation with the unions. On the question of imports and financial help, I have set out precisely the statements that I made to both sides of the industry. It is on the basis of those that we will have continuing talks next Wednesday.
I am one who believes that talks on a constructive future for this industry are far better than seeing the industry tear itself apart on the basis of distorted and misleading rumours.

Mr. Terence Higgins: Does my right hon. Friend agree that there is no future for the miners or anyone else if people are kept in public sector jobs which, regardless of how hard they work, do not produce goods at a competitive price? Does he also agree that increased


public subsidies and higher borrowing are likely to cause higher interest rates and higher exchange rates, and to have a highly adverse effect on the private sector? On import controls, will my right hon. Friend say whether these require the assent of the House?

Mr. Howell: I agree with much of what my right hon. Friend says. When he mentions the burden on industries of uneconomic operations and when we talk about finance, we are talking about taxpayers' money, other people's jobs and the burden on other industries. If we are talking about energy pricing, mentioned by the right hon. Member for Leeds, South (Mr. Rees), one of the problems that has to be recognised—I know that it is recognised in the coal industry—is that the price of electricity, which is high, because we live in an age of high-cost energy, is one of the factors creating additional problems for industry.
Unless we can get competitive coal we cannot get competitive electricity and we shall not have the jobs that we want for our people. That is a lesson that has to be learnt. I agree with my right hon. Friend.

On the question of imports, I have stated the Government's view. That will be discussed at our meeting next Wednesday.

Mr. Joseph Ashton: Is the Secretary of State aware that one of the reasons for the miners' anger was that they felt they were being punished for their success in increasing productivity? Would it not be a good idea to encourage other workers by rewarding them? Is it not a good time to start talking about a shorter working week for the industry, and to give miners the same holidays as schoolteachers or to offer them the same early retirement as policemen? Would this not be the best method of reducing coal stocks?

Mr. Howell: The hon. Gentleman has spoken about punishment, but the best reward for the nation, the industry and the mineworkers is a competitive, profitable, successful industry that can sell to overseas markets as well as to British markets, that can compete with other fuels, and that can produce and sustain investment and jobs for the future. That is what we are aiming for.

Several Hon. Members rose—

Mr. Speaker: Order. I gave hon. Members a long run on this subject yesterday. I propose to call three more hon. Members from each side.

Mr. Patrick McNair-Wilson: Although coal enjoys a substantial price advantage over oil, does not my right hon. Friend agree that there is an urgent need to stimulate coal sales? Will he therefore have talks with the Chancellor of the Exchequer to see what provision can be made for those businesses that wish to install coal-burning equipment? There are substantial tax advantages for those who want to make films, yet I should have thought that the coal industry was more central to our economy.

Mr. Howell: That point was put to me on Tuesday in the House. I recognise its validity. However, I emphasise the point that my hon. Friend made, namely, that coal has a substantial economic advantage over oil. Therefore, even as things stand, it makes good economic sense to tear out oil-firing equipment and put in re-boilering that is based on coal or coal conversion. That makes good sense and I should like industry to do that.

Mr. David Penhaligon: Does it not occur to the Minister that the recent movements on British Steel, British Leyland and British coal can lead only to the conclusion that the movement required is one away from the Government's economic policy of high interest rates and high exchange rates for the pound?

Mr. Howell: The most important movement is to ensure more jobs, which means more competitive products. That applies to every industry, including the great energy industries such as coal. Both sides of the industry who have the interests of the industry at heart want it to go that way and to do so on a constructive basis.

Mr. Eric Cockeram: Is it not the case that over the past few years the miners have behaved with restraint? Is it not true that they settled for a wage agreement that was about 4 per cent. below the going rate of inflation at that time? Is it not also true that they have increased productivity and that they have accepted a closure programme? Was there not peace in the industry until 10 days ago, when Sir Derek Ezra behaved like an IRA bomber and tossed in his report after he had first lit the fuse? Is it not apparent that Sir Derek has achieved his objective of squeezing more money—over and above the £800 million presently allotted—out of the British taxpayer?

Mr. Howell: As I said in my statement, the board believed its plan to be reasonable and acceptable. It put forward a plan for accelerated closures, which included, as Sir Derek Ezra pointed out yesterday, pits which were all virtually exhausted and whose average age was 93 years. When those figures are realised and accepted, some of the language that my hon. Friend used might not seem entirely appropriate. Ninety-three years is a considerable age for a pit, particularly when it is exhausted.

Mr. David Steel;: On a point of order, Mr. Speaker. I am sorry to interrupt hon. Members, but surely it cannot be in order to call a public servant an IRA bomber.

Mr. Speaker: I am sure that the hon. Gentleman would like to withdraw any suggestion that Sir Derek Ezra is an IRA bomber.

Mr. Cockeram: I shall willingly withdraw whatever you request me to withdraw, Mr. Speaker.

Mr. Speaker: I am much obliged to the hon. Gentleman.

Mr. Gwilym Roberts: Does the right hon. Gentleman accept that my right hon. Friend the Member for Leeds, South (Mr. Rees) was right, and that there is still uncertainty in the mining communities? Does not the right hon. Gentleman agree that miners are realistic about pit closures when pits are exhausted? However, they are concerned that the Government should give a hard commitment to the need for an investment programme. Will the right hon. Gentleman at least reassure the miners this afternoon that the Government will back whatever investment is needed to maintain mining skills and to ensure our energy future?

Mr. Howell: The Government have made it perfectly clear, both repeatedly in this House and at yesterday's tripartite meeting, that they have a total commitment to the investment needed to maintain "Plan for Coal". That has never been in doubt and it is reflected not merely in words


but in the substantial borrowing for investment in modern and effective capacity. I hope that I have made that quite clear to the hon. Gentleman.

Mr. John H. Osborn: Is not the problem the high stocks of coal, and are there not EEC provisions for that? Will my right hon. Friend assure me that this arrangement will not result in more expensive coal and electricity for steel making and that there will be continuing opportunities for the export of surplus coal stocks to our EEC partners?

Mr. Howell: It is common ground within the industry that coal should be competitive and should take advantage of the growing opportunities to export coal to the markets of France and West Germany. Those markets are opening up and the Germans and the French are planning on colossal increases in their coal imports. It would be excellent if our competitive coal could get into those markets as well as into our own.

Mr. Allen McKay: Does the Secretary of State accept that this matter began not 10 days ago but with the introduction of the Coal Industry Bill in 1980? Does he accept that we warned the right hon. Gentleman, the Prime Minister and the Government that the Bill's timing would cause collieries to be closed? Will not the right hon. Gentleman accept that he must now regain the trust of the miners? I have spoken to some of my mining colleagues who are visiting the House today and those talks highlighted the fact that they mistrust the Government. Will the right hon. Gentleman accept that he should make a statement that is more explicit about the closure of collieries for reasons of exhaustion alone? Will he not accept that consideration should be given to the timing of the Coal Industry Bill in order to allow the industry more time in which to become viable once again?

Mr. Howell: I made the position explicit and I used the words that appear in the statement when I spoke yesterday to the NUM, the other mining unions and the NCB. I welcome the response of the NUM today. It reflects what I said. It has made a responsible decision which deserves the backing of hon. Members. Indeed, I hope it will have the backing of the hon. Gentleman.

Orders of the Day — Water Bill

Not amended (in the Standing Committee), considered.

New Clause 1

INCREASE OF LIMITS OF EXPENSES RECOVERABLE IN RELATION TO A WATER SUPPLY

'.—(1) In the proviso to section 138(3) of the Public Health Act 1936 (under which a householder may be required to pay up to £60 towards the cost of providing a water supply for a house) for the words "sixty pounds" there shall be substituted the words "£300".

(2) Nothing in this section applies to a notice given under the said section 138 before the commencement of this section.

(3) In the said section 138, after subsection (3) there be inserted the following subsection—
(3A) The Secretary of State may by order made by statutory instrument increase the amount specified in the proviso to subsection (3) of this section; and a statutory instrument containing an order under this subsection shall be subject to annulment in pursuance of a resolution of either House of Parliament.
Nothing in an order made under this subsection shall apply to a notice given under this section before the commencement of the order.

(4) Section 78 of the Public Health Act 1961 (which amended the proviso to section 138(3) of the Public Health Act 1936) is hereby repealed.'.—[Mr. Giles Shaw.]

Brought up, and read the First time.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): I beg to move, That the clause be read a Second time.
Hon. Members may know that in Committee I undertook to table a Government amendment to cover an important point that was raised by my hon. Friend the Member for Reading, North (Mr. Durant). My hon. Friend has apologised for the fact that he is unable to be present this afternoon.
The effect of the new clause is twofold. First, it raises from £60 to £300 the maximum contribution that may be required of a house owner under section 138 of the Public Health Act 1936 towards the cost of installing a wholesome supply of water to a house.
Secondly, it provides that in future this amount may be varied by the Secretary of State by order. Section 138 of the Public Health Act 1936 empowers local authorities to require that any occupied house which does not, in their opinion, have a wholesome supply of water in pipes, sufficient for the occupants, be provided with one. Responsibility for the provision of such a supply rests with the individual owner, but it has always been provided for that there should be a limit on the amount that he can be required to pay. Any excess is borne by the local authority. In 1936, the owner's limit was set at £20. It was raised to £60 under the Public Health Act 1961. With this amendment, we propose to raise it again—to £300. This increase is in line with inflation over the period since 1961 and is needed if local authorities are not to be discouraged on financial grounds from discharging an important public health duty. The provision to enable the Secretary of Stale to vary this limit should enable that limit to be kept more readily in line with inflation.

Mr. Denis Howell: We accept what the Minister says. Obviously, the amount that can be recovered from householders who insist upon the right to have a supply of water needs to be adjusted from time to time, and that is what the Minister is proposing. Having regard to the general economic situation and the present rate of inflation, it is a reasonable proposal and one which finds favour with us.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 3

CHARGES FOR TRANSFERRED WATER

Notwithstanding subsections (4) and (5) of section 30 of the Water Act 1973, the charge made by a water authority for the supply of water in bulk to any other water authority may include, in respect of the supply of water outside the area of the supplying authority, such percentsge increase as may be agreed between the water authorities, or as may be determined by order under section 12 of the Water Act 1945, of the charge which but for this section would be made."—[Mr. Wigley.]

Brought up, and read the First time.

Mr. Dafydd Wigley: I beg to move, That the clause be read a Second time.
The new clause contains a different form of wording from that which was debated in Standing Committee. Its stated aim will have an effect on the cost of water rate powers in Wales.
On Second Reading and in Committee I had an opportunity to stress the iniquity of the present situation and the effect that the increases in water rates will have on ratepayers in Wales. It has been confirmed subsequently that the increase for ratepayers is likely to be 20 per cent.—this at a time when the Government norm for pay settlements is 6 per cent. Clearly, it is a gross imposition. The 20 per cent. figure arises from a number of sources. It is partly the general effect of inflation and partly the effect of losing the £3 million to £4 million costs as a result of the abandonment of equalisation.
In responding to the debate in Committee, the Under-Secretary of State for Wales talked about the weaknesses of the amendments that I tabled and said that they did not meet the requirements. He said that the problems facing water ratepayers in Wales would be alleviated and reduced to the same extent by the fact that the rate of return being required of the Welsh water authority was lower than that being required of water authorities in England over the next few years. I responded by making it clear that although we have an extended period in which to reach the target rate of return, the increase that is required is none the less substantial and significant, and the increase involved in reaching that rate of return over a longer period is higher than the increases in English regions, because they start from a higher position. The Under-Secretary of State for Wales had no reply to that argument.
That is why I tabled the new clause. It meets some of the deficiences in the amendments that were proposed in Committee. It meets the argument that in the absence of equalisation and of a standard charge for water throughout England and Wales, or throughout the United Kingdom, of the kind that we have for postal services and for many of our basic supplies, and in view of the continuing discrepancy of some 30 per cent. in the payments made by water ratepayers in Wales, we should confirm the right of the Welsh water authority to make extra charges for water

that is taken from Wales for use outside Wales. By means of that extra charge, it could achieve equalisation, albeit affecting only three water areas—the Welsh, the Severn-Trent and the North-Western.
4.15 pm
There has been discussion on the question whether the Welsh water authority is already empowered to do that. Whether it is or not—there has been argument between the lawyers about their interpretation of this—what is not clear, and did not come out in Committee, is the attitude that will be taken by the Welsh Office and the Department of the Environment to any proposals that may be forthcoming to relieve the burden that the loss of equalisation payment by making an additional charge for the water taken outside the area from sources inside Wales.
The new clause gives an opportunity to the appropriate Minister to tell us what his attitude is. Does he regard it as fair play that, in the absence of equalisation and in the atmosphere in which the Government advocate the use of free market forces, the Welsh water authority should take advantage of the powers that the new clause would make clear that it has to recoup the money it loses? Or will the message be that ratepayers in Wales have to pay £3 million more, and that it is their hard luck? Despite all that was said by Conservative members on the Second Reading, in Committee, on Report, and on the Third Reading of the Water Charges Equalisation Act four years ago, when they decried the unfairness to the Welsh water powers, the loss of £3 million will now make the situation far worse.
Unless there is a clearer lead from the Government on the issue there will be a wide-scale reaction in Wales to the substantial increase in water charges. That increase could have been minimised by a contribution such as the one I proposed in new clause 3. It could have minimised if equalisation had not been abandoned. I am not saying that the only way is to charge for water transferred from Wales. But in the absence of any other constructive answer to the problem this will appear to the Welsh people as the only way open to them to reduce the imposition put on Welsh water ratepayers by the current formula and by the absence of equalisation.

Mr. Denis Howell: I should like to intervene before the Minister replies. First, I want to say how impressed I am by the ingenuity of the hon. Member for Caernarvon (Mr. Wigley) in getting a re-formed amendment on the Amendment Paper and selected for debate. His new clause highlights what I believe is the real sense of grievance that is felt in Wales about the way in which the Government are tackling the problem brought about by the ending of equalisation charges, for which I had a measure of responsibility when I was the Minister concerned.
It is important that the House should understand the reason for the Equalisation Act, which, as the hon. Gentleman said, benefited Wales to the extent of £3 million. Much of our water that goes to the industrial Midlands and the North-West comes from Wales. All the Elan valleys and Claerwen valley reservoirs, dams and constructions were financed almost wholly by Birmingham ratepayers. The hon. Gentleman spoke about free market forces being used in an attempt to make people in the West Midlands, Birmingham and the North-West pay more than they should for water, but any such economic assessment would involve compensating the investors—the very people whom the hon. Gentleman


wishes to charge more for their water. It cannot be right in equity or in terms of economics that those who invested huge sums in capital works and provided the means of supplying the water, of creating numerous jobs in Mid-Wales, and of creating great capital assets that produce a lot of rateable value for the local authorities in the area, should now have an additional charge imposed upon them in the name of what the hon. Gentleman calls free market forces.
I have never believed in the philosophy of free market forces. That philosophy comes better from the Conservative Benches than from the hon. Gentleman. It may be because he is not used to it and does not believe in it that he has got it all mixed up. We would very strenuously object to any proposal to sell water from Wales to the Midlands, or to anywhere else, at a profit. Indeed, the whole basis of the sale of water between one region and another is that of no loss, no profit. That basis has been accepted on each side of the House and is still accepted. It must be right in equity as between one set of people and another.
That is not to say, however, that the hon. Gentleman has not raised a substantial point, which he emphasised once or twice during his remarks. His point is that, when the system of equalisation charges is ended, it is bound to create some very substantial hardships and a substantial lack of fairness. When we applied our minds to the equalisation proposals, we considered the problems of Wales. The cost of carrying water up the valleys, and of carrying the drainage and the sewage down the valleys to appropriate treatment centres, produces water charges for the Welsh people which are totally different from those which have to be paid for the same services by large metropolitan areas such as London, Birmingham and Manchester.
I am sure that the hon. Gentleman will agree that if we accept his proposal we shall have to include also the people in the areas of the South-West water authority, the Anglian water authority, and possibly in parts of the North of the country, where the same unfortunate discrimination between the charges can be found. That discrimination gives rise, of course, to the sort of resentment that the hon. Gentleman has voiced today. When we consider that charging policy in relation to other nationalised products, the position is even more difficult to defend.
A letter posted to Westminster from the Orkneys costs exactly the same as a letter posted to Westminster from Camden Town. We do not have a grossly differential charging policy in respect of our postal services, or our gas and electricity services. It is extremely difficult for the people of Wales—as theirs is the country in which the water is gathered, and from which it is pumped, particularly to the industrial heart of our country—to understand why there should be a differential policy for water.
The equalisation proposals were meant to deal with that basic unfairness and, as the hon. Gentleman has conceded, they worked reasonably fairly, producing for Wales a sum of about £3 million a year. That has now come to an end. In Committee the Welsh Minister made it clear that the Government would try to deal with the matter by other means, and when we last debated the equalisation proposals in this Chamber the then Minister said that the order that we were debating would be the last one under the equalisation measure. We were also told by the Minister, or by one of his colleagues, that the Government

would look after their Welsh friends. But what is to happen about consumers in the South-West, in East Anglia and in the North of England who suffer from the same problems?
The Government's answer is to give what I would describe, in layman's language, as extended terms of credit for the Welsh water authority's borrowing, so that it has to pay rather less in interest charges on its massive borrowings this year than it would otherwise have to pay. But, as the hon. Gentleman said, the authority will have to pay rather more in the long run. Instead of borrowing the money over 20 years, it will be borrowing it over 25 years and will pay more in total on interest charges than would otherwise be the case.
If that solution is sensible for Wales, why is it not sensible for Devon and Cornwall, for East Anglia and for the North of England? Will similar facilities be available to other regional water authorities?
I do not think that what the hon. Gentleman has proposed is a sensible answer to the problem. The right answer is to move towards a more sensible equalised pricing policy for water, so that, wherever we live in this land, when we turn on the tap or dispose of our dirty water, the charges will be equitable as between one citizen of this country and another. Although we object to what the Government are doing, we cannot, for the reasons that I gave earlier—

Mr. Wigley: Before the right hon. Gentleman moves to his conclusion—I suspect that I know the direction in which he is going—will he make clear that he accepts that with the ending of the equalisation formula the water rate payers of the Severn-Trent area will be better off to the tune of about £½ million as compared with Wales? Accepting that it is equitable that £½ million more should be paid in the name of equity in order to apply the formula of equal distribution—as with the postal services, to which he referred—will he agree that it would not be unreasonable if a charge of that order were to be made by the Welsh water authority in order to arrive at the position of equity that he has described?

Mr. Howell: I understand the hon. Gentleman's logic, but I cannot embrace it.
I was intending to deal briefly with the wording of the hon. Gentleman's new clause. He is now suggesting that because the ending of the equalisation provisions has produced a sense of inequity as between the Welsh water authority and the Severn-Trent water authority, that should be dealt with in the terms of his new clause.
It is true that the Severn-Trent consumers will be marginally better off, although only marginally better off, than was previously the case, but if these adjustments are to be made and if we are to have a pricing policy that is fair between all water consumers—not only between the Welsh water authority and the Severn-Trent water authority but between other regions—the question is how it is to be done. Our solution was for a national water authority which would be able to achieve that policy, but it has not so far found favour.
The hon. Gentleman's new clause is saying, in effect, that if two water authorities agree, they can add an additional cost to the price of water—when it is transferred, say, from Wales to the Midlands—above that of the no profit, no loss concept. It cannot possibly be right that that principle should apply between two water


authorities. It would lead to tremendous political dogfights throughout the country. No doubt as the hon. Member represents the Welsh national party that is exactly what he would like to see, but I cannot believe that it would be in the interests of water consumers that we should have these dog-fights every time water is transferred as to what the additional charge ought to be which is imposed by one and accepted by another.
4.30 pm
As hon. Members will know, under the Water Act which operates at the moment, where transfers take place any dispute as to what is the correct no profit, no loss calculation is settled by the Secretary of State, which means in practice by two Secretaries of State if Wales is involved. Even more realistically, if they are not in agreement it is settled by the Cabinet as such questions should be.
I have great sympathy with the hon. Gentleman for having lost the additional resources which the Government of whom I was a member provided for him under the Act which I took through the House. He is entitled to take issue, as indeed we on these Benches take issue very emphatically, with the Government. We would point out to the Government the essential unfairness of their proposals. Nevertheless, I cannot say that the new clause provides the way to remedy the situation. It should be remedied nationally either by the National Water Council as it is constituted or by the Government making orders and laying schemes before the House which apply evenly to the whole country so that the principles can be debated and accepted or rejected by hon. Members. For those reasons, we on these Benches will not be able to support the new clause as drafted.

The Under-Secretary of State for Wales (Mr. Wyn Roberts): We have been over this ground before in Committee, but the hon. Member for Caernarvon (Mr. Wigley) has been ingenious enough to enable us to have yet another discussion. The new clause is designed to ensure that a water authority may charge for water which is transferred in bulk to another water authority on a basis which is calculated independently of other charges of the authority fixed under section 30(4) and (5) of the Water Act 1973. Subsection (4) provides:
In fixing charges for services, facilities or rights a water authority shall have regard to the cost of performing those services, providing those facilities or making available those rights".
Subsection (5) requires that every water authority shall take steps to ensure that as from 1 April 1981 its charges do not show an undue preference to or discriminate unduly against any class of persons.
I am, however, advised that an agreement under section 12 of the Water Act 1945, as substituted in schedule 4 to the Water Act 1973, may be entered into upon terms and conditions which are not governed by the requirements of section 30(4) and (5). Section 12 clearly states that an agreement may be made on—I stress this—any terms and conditions. Therefore, this new clause is not necessary.
The right hon. Member for Birmingham, Small Heath (Mr. Howell) and the hon. Member for Caernarvon are concerned that, with the loss of equalisation payments, the Welsh water authority will no longer receive some £3 million per annum which it had previously enjoyed by way

of contributions from other water authorities. The hon. Member for Caernarvon argues, therefore, that, if it is Conservative Party philosophy that water authorities should behave as separate commercial entities, each seeking to maximise its profit, it is right and proper for the Welsh water authority to make good the loss of equalisation payments by charging the North-West water authority and the Severn-Trent water authority for water which is supplied to them in bulk. I note that the right hon. Gentleman does not agree with that view. Let me say to the hon. Member for Caernarvon that so far no proposal has been advanced for changing fundamentally the bases on which the Welsh water authority charges the other water authorities for Welsh water. Clearly there will have to be changes.
The introduction of current cost accounting alone requires a re-examination of the methods under which charges had previously been calculated. Inflation, too, will inevitably play a part. I understand that the question of charging for Welsh water is under consideration by the Welsh water authority which has asked its management team to produce a paper on the subject. It would be totally wrong of me to pre-empt the consideration which may be given by the Welsh water authority to this matter by indicating a Government view as to the appropriate level of charging for 1981–82 onwards, as the hon. Member for Caernarvon pressed me to do.
This is a matter for consideration in the first instance by the Welsh water authority and then for negotiation between that authority and the other water authorities concerned. They may come to agreements which are entirely satisfactory to both parties about the level of charging. It is to be hoped that they will. Only if there is disagreement, as the right hon. Gentleman indicated, will the Government become involved. It would be quite wrong for me to prejudge the decision on any such reference by anything that I say in this House today.

Mr. Wigley: The hon. Gentleman mentioned a moment ago, as he did in Committee but without quantifying it, the fact that current cost accounting will have an effect on the charges that will be relevant next year for the Welsh water authority and for other water authorities. Following the talks that he had recently with the Welsh water authority, can he give any indication of what will be the implication of current cost accounting in financial terms, whether it will close the gap of the loss of £3 million which we are suffering and, if it does, to what extent?

Mr. Roberts: Again, it would be wrong of me to preempt what the authority is likely to say on this subject. Perhaps I may say that there is the change from historic costs which have been taken into account in charging for bulk transfers to current cost accounting. As I said in Committee, that change in itself will mean that the Welsh water authority should secure more for the transfers that are made.

Mr. Denis Howell: We might return to this at a later stage because it is important. Current cost accounting means an increase in charges. That is one of the things which has undoubtedly led the Government to send accountants to every regional water authority, on which point we would like a little guidance later. Would the hon. Gentleman at least confirm at this stage that however those


figures come out, the basis of the Welsh water charges still has to be no profit, no loss, which is an important principle to uphold?

Mr. Roberts: I am covering again ground already covered when I try to reply to the right hon. Gentleman. The fact is that the Welsh water authority is now considering its position and the impact of current cost accounting and inflation on the charges that it makes for bulk transfers. Obviously it has to discuss with other water authorities whatever it decides upon. As I said, it is to be hoped that it will reach an agreement, in which case the matter will not be referred to the Government. Certainly there has been no change of principle on the part of the Government. While I appreciate, therefore, that—

Mr. Howell: That means that the no-loss, no-profit principle will apply even under the new accountancy procedures which have to be taken into account. It is important that the no-profit, no-loss principle is maintained in the transfer of water from one water authority to another.

Mr. Roberts: As I said, no different proposal has been put before us, and certainly the principle of no profit, no loss has been applied by successive Governments, including this Government.

Mr. Wigley: Only a moment ago the Minister referred me to schedule 4 to the Water Act 1973, which incorporates sections 12 and 13 of the Water Act 1945, and stressed that an agreement could be made for the supply of water for any period on any terms and conditions. Those are the words that he underlined and they do not refer to the no-profit, no-loss principle. Which is it? It is either one or the other.

Mr. Roberts: Again, we are covering the same ground.

Mr. Wigley: Yes, but we do not know which way it is.

Mr. Roberts: Perhaps I may reiterate the point. No proposal has been advanced for fundamentally changing the basis on which the Welsh water authority charges other water authorities for Welsh water. That is the position now. I went on to say that the water authorities still have it under consideration and there are various steps that may be given further consideration.
While I appreciate the points made by right hon. and hon. Members, and have sympathy with the efforts made by the hon. Member for Caernarvon on behalf of Welsh consumers, I have to say that this is neither the time nor the place to pursue the question further, and it would not be in the interests of Welsh consumers to do so on this occasion.

Mr. Wigley: I do not agree with the Under-Secretary of State that this is not the place and time to pursue the interests of Welsh water ratepayers in relation to the bills they will face in May. They will want the earliest possible opportunity to have relief from the tremendous increases that will come their way.
There will be wide-scale concern that even now, on Report, the Government are unable to quantify the effects of the changes which the Under-Secretary of State has underlined. We are aware that there will be changes in accounting methods which will have am impact not necessarily only in one direction. There will be an impact

for the Severn-Trent and North West authorities as well as for the Welsh water authority. I suppose that the impact of current cost accounting would be marginally to the benefit of the Welsh authority, but we do not know to what extent, and we do not know that it will go towards substantially offsetting the £3 million which the Under-Secretary of State accepts that we in Wales are losing as a result of this Government's policy. The Welsh water ratepayers will have to pay £3 million more because of a deliberate decision taken by the Conservative Government. It is important that the water ratepayers in Wales realise that.
There will also be concern about the line taken by the right hon. Member for Birmingham, Small Heath (Mr. Howell). Although he understandably wants to see a system of water charges based on service and on equity rather than on charging in excess of costs, he and his party are not willing to support any formula that would allow the imposition of a charge over and above cost to make up the £3 million Wales is losing. He will not accept a charge even of £500,000 for Severn-Trent, which is the charge that is being made now under the equalisation formula, because of his no-profit, no-loss principle, not because of the equity of the bills that we are facing.

Mr. Howell: The hon. Gentleman must not misinterpret my comments. Of course I believe in an equalisation plan and, as I said, I provided for it in legislation. We would favour a national water authority or council with a national pricing policy the principles of which were clearly understood, but it would have to be on known principles that applied to the whole country not just to the people of Wales, because that would be unfair to other authorities which are losing as a result of the collapse of the equalisation plan—the South West and Anglian water authorities, and so on.

Mr. Wigley: I accept what the right hon. Gentleman says. Given the choice, I, too, would rather treat the supply of water as a service. That policy would have regard to what is happening in Wales as well as to what is happening between Wales and other areas. But the formula to which the right hon. Gentleman refers is not on the agenda. What is on the agenda is a 20 per cent. increase in water rates for the people of Wales. I am putting to the House a formula whereby that could be offset. I would have hoped that, given common sense, it would be possible by making slight extra charges to offset the £3 million extra bill which will come through our letter boxes.
I am therefore disappointed that the Labour Party, although it does not accept the principle of the amendment, is not in a position to accept it as a short-term palliative to offset the effect on Wales. That no doubt is a matter which the Welsh water ratepayers will take into account at the May election.
There is one ray of hope from this debate from what the Under-Secretary of State said. Notwithstanding section 30 of the Water Act, schedule 4 stands, and parts of the Water Act 1945, which permit charging over and above the basis of no-cost no-profit but on any terms and conditions. The Under-Secretary of State rightly said that as no proposals had yet been forthcoming from the Welsh water authority along these lines there was no change in the charging


system. The message to the Welsh water authority should be absolutely clear; it must put such proposals forward, relating them to schedule 4 to the 1973 Act.

Mr Wyn Roberts: The hon. Gentleman will be aware that the supply of water to North West and Severn-Trent is governed by existing agreements, and new agreements have to be renegotiated.

Mr. Wigley: Yes, that is the very point that I am addressing—the renegotiation of new agreements that bring in a little more money to make up for the £3 million that we are about to lose by the Government's decision. The message is clear that there is room to look for such charges under existing legislation, under enactments that may not have been put into force as yet but which are on the statute book. We must facilitate such procedures without any legislative amendment such as I am seeking.
That being so, I accept that there may not be any need for the new clause. The facility is already provided in schedule 4. I hope that Dr. Haydn Rees and his colleagues on the Welsh water authority will note this debate and ensure that that extra minimum charge over and above the break-even point on a no-cost, no-profit basis is made to recoup the £3 million which otherwise the water ratepayers in Wales will have to find although they are already amongst those who have to pay the highest water bills in the United Kingdom. If for no other reason, our debate has been of benefit. The way forward for the Welsh water authority is now clear and I have no doubt that it will follow that road.

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 4

COMPENSATION FOR LEAKAGE DAMAGE

'In the event of any leakage or escape of any substance from a sewer, main, reservoir or other works of a statutory water undertaker, or of any agent of a statutory water undertaker, causing loss or damage, any person sustaining loss or damage shall be entitled to full compensation therefor with or without proof of negligence provided the amount of compensation payable to or in respect of any person in respect of any injury or damage caused by any leakage or escape as is mentioned may be reduced by reason of the fault of that person if, but only if and to the extent that, causing of that injury or damage is attributable to any act of that person commited with the intention of causing harm to any person or property or with reckless disregard to the consequences of that act.'.—[Mr. Graham.]

Brought up, and read the First time.

Mr. Ted Graham: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this we may discuss new clause 5—Compensation.

Mr. Graham: The new clauses were tabled primarily to provide the House with a short debate so that we could reinforce points made in Committee. New clause 5 is perhaps more germane because it deletes the direct reference to sewers and concentrates on the main point made by the Minister in Committee.
We are anxious about innocent people whose property, through no fault of theirs, is damaged by a burst water main, a collapsing sewer or a sewer overflow. They have the almost impossible task of proving that the damage is a result of negligence. The Minister showed the greatest

possible sympathy for our case. We recognise the practical problems involved in dealing with the sewer aspect of the problem. There is no difference between us in our desire to legislate for compensation. We tabled the new clause to stress our anxiety.
The Minister will tell us that it has not been possible to honour the assurance that he gave in Committee that he would do something on Report. That has much to do with the haste of the business managers who want to get the Bill into another place as quickly as possible because of the urgency involved in settling borrowing requirements.
We believe that we have a good case for both water and sewage damage. In Committee the Minister said that the greatest damage arises from burst water mains. He went out of his way to explain why it was right and proper to deal with sewers as well as water. Perhaps rhetorically, he said:
Why should the new clause be attached to this Bill, which is fundamentally about water per se and the problems associated with it? The answer is, clearly, that water authorities now have an undertaking for sewerage.
That is why it is difficult to separate damage arising from water and damage arising from sewers. The Minister said:
The question of the liability to be assessed in terms of sewerage is much wider, and the complexity of the issue is so great that I have been unable to give full attention to it in the relatively brief span for which we have been considering this Bill …I shall need to consider the matter further before I can form a considered view of the question of the extension of liability to the sewerage system as in the new clause.
We fully understand the constraints of time and the difficulty of finding the money that might eventually be needed. We do not want to make a big issue of the Minister's being unable to deal with the matter now. We hope that he will deal with water later.
The Opposition's job is to remind the Minister of the commitments that he made in Committee. The Minister said:
To summarise the position on new clause 1, the principle of imposing strict liability in relation to water supply is attractive. I am prepared to consider a Government amendment on Report to this effect, although I must say to the right hon. Gentleman and his colleagues that I have not yet completed all the consultations within the Departments which are so clearly necessary
I assure the Committee that I hope to be able to produce a Government amendment on Report which will deal with the matter of strict liability in relation to water supply only. I am certainly prepared to consider the principle of dealing with the sewerage system and the problems of sewers. But, in fairness to the hon. Member for Bury and Radcliffe, I must say that I think it unlikely that I shall be in a position to take the matter much further on Report.
Many people outside the House will be heartened that the Minister is prepared to discuss the principle of compensation and liability, not in a positively legislative manner but recognising that people are worried about it and would like to discuss the matter with him.
When I concluded my remarks in Committee I said:
I hope that if the Minister intends to deal directly and narrowly with the water aspect of the problem, he will accept that the Government will have to come forward as quickly as possible with a statement or paper recognising that the sewerage aspect of the matter needs to be dealt with."—[Official Report, Standing Committee A, 10 February 1981; c. 151–6.]
I assume that a satisfactory new clause will be introduced in another place to deal with water. If we deal satisfactorily with the damage that can be sustained by a householder as a result of a mains burst we must recognise that there is a close affinity between that and the damage and hurt that results from sewage leaks. An occupier of


land could suffer loss through a burst water main and receive proper compensation. Meanwhile, a neighbour could suffer from an overflowing or collapsed sewer and get no compensation.
The principle that the community, through water charges, reimburses an individual who suffers as a result of the failure of a community asset is identical in relation to both water and sewers. At present, at the Minister's request, a policy of ex gratia payments to uninsured householders suffering loss through burst mains is operated by water authorities because of possible personal hardship. If the Government accept the principle of compensation for people suffering loss through sewer failure it is within the Minister's power to make a similar request to water authorities to make ex gratia payments until such time as the legislative position can be resolved. The Minister's authority is embodied in section 5 of the Water Act 1973. It enables him to give directions of a general character to water authorities.
I believe that the Minister recognises the serious and calamitous personal circumstances which can flow from the sewer problem. This matter should not be pushed into pigeonholes. We have the Minister's sympathy and understanding. We want to help him to make a positive contribution which could affect all our constituents.
Will the Minister consider receiving an all-party deputation, with outside interested bodies, to examine the complex nature of tackling the repair and renewal of our sewerage system—of course without prior commitment—and to make recommendations thereafter? The general interest in the Bill's passage indicates clearly that there is a massive problem that should be considered seriously. I recognise that the problem has not been created by the Government. The Minister would be doing a valuable service to the House in recognising our general responsibility. I stress that my proposal would be an all-party approach and would include outside interests. A useful purpose would be served by a meeting or two to ascertain the help that can be given.
I express my gratitude to the hon. Member for Grantharn (Mr. Hogg), who has shown a keen interest in these matters. He has drafted amendments and pressed the case on Second Reading and in Committee. It is in that spirit of conciliation that I commend the clause to the House.

5 pm

Mr. Douglas Hogg: It is a great pleasure to take up the remarks of the hon. Member for Edmonton (Mr. Graham). I thank him for his kind words. I am grateful to him and his hon. Friends for the support that they have felt able to give to this proposal. The hon. Gentleman will appreciate that new clause 4 is somewhat of a composite, a concept with which he is rather more familiar than I am. I drafted new clause 5 with a view to curing one or two defects that may have arisen in new clause 4.
The objective of new clause 5 is to confine the strict liability imposed by the Bill to escaping water and to define contributory negligence in that context rather more exactly than previously. I have had the opportunity of advancing the arguments in favour of strict liability both on Second Reading and in Committee. That being so, I do not propose to repeat them now. Once again, I thank Opposition Members for the support that they have given.

I thank my hon. Friend the Under-Secretary of State for his helpful and generous response to my proposals on Second Reading.
In view of my hon. Friend's remarks in Committee, I am optimistic that he will be able to give an assurance to the House that he will ensure that a new clause is moved in another place that will meet substantially the requirements of the House. I visualise that my hon. Friend will tell us that the clause will be confined to escaping water and will relate only to installations that are within the control of the statutory water undertaking. Speaking for myself, that would be satisfactory.
If that is my hon. Friend's response, I shall not wish to press my clause. I shall dwell on one or two matters that I hope will find their way into the clause.
I share the views of the hon. Member for Edmonton on sewerage. It may not be possible to extend the concept of strict liability to sewerage in the clause which is to be moved in another place. However, I hope that the Government will not overlook the requirement to impose strict liability at some future date. I welcome and endorse the hon. Gentleman's comments on giving a practice direction to water authorities requiring compensation to be made available to those who suffer damage as a result of escaping sewage.
When my hon. Friend considers the new clause which is to be moved elsewhere, perhaps he will bear in mind one or two desirable elements. First, I hope that the new clause, while providing compensation for damage to property, will not exclude compensation for consequential loss. He will appreciate that there are many situations when damage to property results in consequential loss such as loss of profit. That often happens when damage is done to farmers' machinery or to industrialists' plant. I hope that the clause will take account of that.
I suggest that the clause should be drawn in a way that includes compensation for personal injury. In the majority of instances that we are contemplating, we envisage water escaping from a pipe and flowing on to adjoining land. I am sure that my hon. Friend will not overlook the fact that many pipes adjoin roads. When water flows on to a road it results in a road hazard. That may result in quite serious personal injury. I hope that any new clause that he may be minded, through his friends in another place, to move elsewhere will include compensation for personal injury.
I hope that the new clause will include the concept of contributory negligence. I was rather alarmed when I considered this matter for the first time that we might be landed with a clause that had the result of depriving a claimant of all his compensation if he was but a little at fault. I hope that any new clause that may be laid elsewhere will encompass the concept of contributory negligence.
I do not want to detain the House further. I give my hon. Friend the opportunity of giving any undertakings or assurances that he thinks fit. If he is able to give the undertaking for which I hope, may I say on behalf of the agricultural and farming community and on behalf of the industrial community generally that we welcome his generous response to the matters that I raised on Second Reading?

Mr. Giles Shaw: These new clauses were based on a new clause that we considered at some length in Committee. Extending the principle of liability to water, to sewerage and to all other aspects of the water


authorities' domains has aroused considerable interest. It is right and proper that we have a further opportunity now to debate it. It is an issue that has not attracted a vast attendance in the Chamber. There is still room for one or two more to join us on these Benches.
The principle involved will be recognised by every hon. Member as being of great importance to his constituents. It is right that we should discuss it. When we considered the issue earlier, I indicated clearly that I had broad sympathy with the principle of imposing strict liability on statutory water undertakers when damage is caused by escapes of water from water mains. It seems wrong that individuals should bear the cost when they suffer damage from a burst in a pipe that is placed in the ground for the benefit of the public at large, and where the burst is no fault of their own. That remains my view.
Part of the difficulty arises because of the wide powers that water undertakers have to lay mains and sewers across private land. In many instances there are no wayleaves, and no deeds of agreement providing for compensation in the event of damage. Under the law as it stands, water undertakers are not liable for such damage except on proof of negligence. As was pointed out so powerfully in Committee, it is exceedingly difficult to prove that. Unless there is that proof of negligence undertakers are not obliged to pay a penny. However, it has been recognised that they pay on an ex-gratia basis to uninsured householders. That is right and proper, but it is a practice that serves to highlight the legal problem. From the water undertaker's point of view there is a particular difficulty. As they are not liable for damage in law they cannot insure themselves against it.
It is desirable to restrict change for the time being to water mains. The case of Rylands v. Fletcher established a form of strict liability in the case of reservoirs. I am advised that the same principle would probably apply to "other works" of the undertakers—for example, water treatment works and sewage disposal works. I do not consider it necessary to deal with reservoirs or other works in the Bill.
Sewers present a much more complicated problem. There is a lot in drains, and no doubt that is why sewers present a complicated problem. In Committee we had some discussion on the subject. Reference was made to the massive problem of derelict sewers in certain areas. The water authorities have no control over the amount of effluent carried by particular sewers. Any householder can connect a drain into a public sewer. But the cost of renewing or replacing derelict or overloaded sewers would be enormous. Does that, or should it, affect liability? Many housing estates are served by private and not public sewers. Should an amendment which benefits only those served by public sewers be accepted? How would an amendment relating to sewers affect the relative position of statutory undertakers for various services, such as gas, electricity, telephones, and so on? What would the position of highway authorities be under an amendment of this sort?
We have had an opportunity to consider water mains. I am not expecting answers to the questions that I have posed. I draw them to the attention of the House in asking that the House accepts that we cannot reasonably tackle all the problems now. They will need further consideration. Although the hon. Member for Edmonton (Mr. Graham)

stressed that he wished us to consider the position of sewers and sewerage and not to exclude it from our minds, at present I do not think that it would be feasible to tackle the ramifications of that in time for an amendment to be tabled during the passage of the Bill. But I take the point of principle that he raised. I hope to go sufficiently far to satisfy the hon. Member for Edmonton and my hon. Friend the Member for Grantham (Mr. Hogg). Having gone sufficiently far on the principle in relation to water mains, I cannot easily exclude that the principle should be established for sewage and sewerage. For the moment, I cannot deal with that issue as easily, in large measure because the water undertakers—with whom the Bill deals fundamentally—are a discrete body which has a large responsibility, and we can control water mains and the authorities thereto. That is not so with the sewerage and drainage system.
The matter of principle is duly noted. I give an undertaking to the hon. Member for Edmonton that we shall not neglect that matter of principle. Indeed, I go further and say that we should be willing to discuss with colleagues, on an all-party basis, the principles that lie behind the matter and some of the problems that we shall have to deal with before we can be satisfied that the matter can be dealt with legislatively.

Mr. George Cunningham: I apologise for intervening when I have not been here during the debate. I was unable to be here. I have had a 10-year interest in the subject. I think that it was exactly 10 years ago that the House discussed the extension of liability.
Will the Minister bear in mind that one of the principal cases on this issue is that relating to gas mains? It arises from gas leakage, which then caused water leakage. If we are to tackle this in a comprehensive fashion, it may be right to bring in not only water and water-related services, but gas services.

Mr. Shaw: We have had discussions—indeed, the time for discussion has been relatively short—with the Department of Energy about the proposals on water. It will be recognised that we are not making a new principle which is at variance with the way in which the gas authorities will have to deal with their problems. I assure the hon. Gentleman that we shall look closely at the consequences of the liabilities that occur to other undertakers, such as gas, in relation to water mains that are described in the new clauses.
I turn to the point on which the hon. Gentleman was seeking clarification. We have been able to make progress since our deliberations in Committee on discussing the principle of an amendment on water and water mains and to impose strict liability on water supply. I explained that I had not completed all the consultations with Government Departments that are necessary. However, I am pleased to be able to tell the hon. Member for Edmonton and my hon. Friend the Member for Grantham that those consultations are more or less complete and that we shall be tabling in another place an amendment dealing with damage from burst water mains.
I regret that it has not been possible to table the amendment for debate today. I acknowledge the fact that the short time between Committee and Report has not made it easier for us to fulfil the undertaking that I gave in Committee. Having established the principle, the


drafting of the amendment will be done with great care. I have seen a draft already, so we are well on the right track. There are such important legal principles at stake that it is inevitable that the drafting be done with care. I ask the House to be patient and await the amendment that we shall move in another place. The House will have an opportunity to consider it in due course.
My hon. Friend the Member for Grantham asked that we consider not excluding consequential loss, personal injury and third party loss. In the context of the amendment we propose, I agree with him that we shall consider those factors. I take note of what he said about contributory negligence. If we can arrange it, we hope to deal with that as well.
In view of those assurances, I hope that the hon. Member for Edmonton and my hon. Friend the Member for Grantham will feel able not to press their clauses.

Mr. Graham: I am not one for looking a gift horse in the mouth. All through the debate we have recognised that, although water and sewage have an affinity, especially in the context of the Bill, they must be seperated, for the reasons given by the Minister. We are grateful for small mercies. It is clear, without wishing to cause offence to the Minister, that prior to the Bill it was not in the minds of the Minister or his colleagues to tackle the difficulty of proving negligence. The principle has been accepted not only for water but for sewage. We have made great strides. The principle has been accepted and the Minister is asking us to accept—which I do—that there are practical difficulties in producing a satisfactory form of words.
As my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) said, there are consequencies arising from what might appear to be a simple amendment dealing with what should be a straightforward issue. I am grateful to my hon. Friend and to the Minister for acknowledging that and for reminding the House that one should not endeavour to solve only a part of a problem if one can see that it is a major problem.
We are disappointed, however, that, in effect, the Minister has implied that, while he can see his way clear to introducing an amendment in another place which will deal with water, when that amendment appears it will exclude any reference to sewage.
However, I am heartened by the Minister saying, in response to my suggestion, that there should be an all-party initiative. I hesitate to use the word "deputation" because the matter needs to be discussed. The initiative should be on a non-party basis to include outside interests. I am thinking particularly of representatives of the National Farmers Union—which has been assiduous in drawing my attention to the problem—the Association of Metropolitan Authorities, and others.
Some time should be taken to consider the best way in which such discussions can take place. The principle has been conceded. The hon. Member for Grantham (Mr. Hogg) mentioned the consequences. The more I listen to the argument—I am a comparative layman on this subject—the more I am willing to acknowledge that we need to be careful, not least to use the right wording. My hon. Friend the Member for Islington, South and Finsbury said that from his experience the subject had been discussed 10 years ago. From other people's experience it has been discussed for many years and the House still has

not dealt with it. If not a scandal, it is a sadness that all those outside affected by these issues are still looking towards the House to provide a way out.
In those circumstances I am disappointed that we have not achieved the whole cake. But half a loaf is better than none, and we have the copper-bottomed assurance from the Minister that in another place a form of words will be introduced. We shall scrutinise the amendment with care and, perhaps, have an opportunity of approving the amendment when the Bill returns from another place.

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 2

EXEMPTION FROM CHARGES FOR WATER FOR FIRE FIGHTING

Mr. Giles Shaw: I beg to move amendment No. 3, in page 2, line 5, at end insert
'but subject to the provisions of any order made under subsection (2) below,'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 5.

Mr. Shaw: These are drafting amendments. In its present form, the clause is confusing on one point. We need to be clear that no consumer can ignore the effects of the Secretary of State's orders under subsection (2), which spells out the basis for calculating charges where there are supplies both for fire fighting and for other purposes.
We do not think that the consumer should be able to argue, from first principles, that his exemption should be what he thinks, and not what the authorities properly calculate under subsection (2). That could be important where he has a supply that is usually fully used for his every-day industrial or other purposes, but which he can switch to fire-fighting in an emergency. He should not be entitled to any exemption of his availability charge in such a case. The Secretary of State's orders will make that clear.
The first amendment specifically limits the exemption so that it does not override the charging arrangements contained in the orders, where there is this mixed supply case. The second amendment makes it clear that charges assessed on the basis of an order are the charges that will have to be paid.

Amendment agreed to.

Mr. Giles Shaw: I beg to move amendment No. 4, in page 2, line 9, after 'apparatus', insert 'installed'.
In Committee the hon. Members for Hemsworth (Mr. Woodall) and Batley and Morley (Mr. Woolmer) sought clarification about the extent to which the exemption from charge would apply when water was used for testing fire-fighting apparatus or equipment. It was felt that, as drafted, the clause could prevent exemption from being given in the case where fire-fighting apparatus or equipment had been installed but not yet used. It might also be claimed by manufacturers of fire-fighting equipment that they would be exempt from charges for water used in testing such equipment at their works.
Clearly, that is not the intention, and I promised to consider the point further. The amendment now seeks to clarify the position and shows that water will be free of


charge if it is used to test apparatus which has been installed in premises. The amendment will thus satisfy the assurances sought by Opposition Members.
The hon. Member for Hemsworth raised a certain point in Committee. I explained that in a few areas local statutory provisions allowed the water undertakers to install meters where water was used to extinguish a fire which lasted for three days or more, but I also mentioned that no charges were made for water taken. The proposed amendment was withdrawn. However, I did undertake to consider the implications behind the amendment if the provision was required for operational purposes. I can now tell the House that the water authority principally concerned has written to the Department confirming that it was concerned about the charging aspects of that type of arrangement, and not the operational requirement. Once the Bill has been passed it appreciates that no charge can be levied for the water used in fire fighting. It does not seek to pursue the matter further. I hope that the hon. Member for Hemsworth is reassured by that additional information.

Amendment agreed to.

Amendment made: No. 5, in page 2, line 15, leave out 'their charges' and insert
'the charges payable to them'—[Mr. Giles Shaw.]

Mr. Giles Shaw: I beg to move amendment No. 6, in page 2, line 18, at end add
';and such order may make provision for arbitration.'.
As the House knows, the purpose of this subsection of clause 2 is to allow the Secretary of State to make orders which will determine what charges will be paid by those consumers who receive a supply of water which is mixed, that is, where the supply provides water for the purpose of fire fighting and for other purposes. The charges which are to be paid will be based on an assessment made by the water undertaker which takes into account the physical arrangements of supply such as the size of the meter or supply pipe and the quantity of water used for those other purposes. The basis for such assessments will appear in the orders. However, there may be situations where the consumer will wish to question the assessment and no agreement can be reached between the two parties. There is a need for such disputes to be settled by arbitration. The purpose of the amendment is to allow the Secretary of State to make provision for arbitration in the orders that he will make.

Amendment agreed to.

Clause 4

SEPARATION OF COMMON WATER SERVICE PIPES

Mr. Giles Shaw: I beg to move amendment No. 7, in page 3, line 23, leave out from '(b)' to 'any' and insert
'a payment in respect of the supply of water to'.
The problem of the use of the term "water rates" exercised us in Committee. The problem was rightly pointed out by the right hon. Member for Birmingham, Small Heath (Mr. Howell). I undertook to come forward with an appropriate Government amendment. There are two difficulties with the term "water rate". The first is that the word "rate" is not really appropriate in the context of payments for water supply. Strictly speaking, since 1973 we have been talking about charges for services provided,

not about rates. But even if we were to overlook that difficulty, there would be a problem because the term "water rate" does not nowadays cover every domestic circumstance. While it is true that the vast majority of householders pay their charges on the basis of rateable value, not everyone does. Perhaps the most common exception is the increasing use of water meters that allow consumers to pay for the water they actually use. The term "water rate" does not adequately cover that, or, indeed, any other case. The amendment, therefore, provides an alternative form of words which gets round the problem.

Amendment agreed to.

Mr. Giles Shaw: I beg to move amendment No. 8, in page 3, line 34, at end insert—
'( ) In subsection (1) of section 42 of Schedule 3 to the Water Act 1945, after the word "section" there shall be inserted the words "and of section 4 of the Water Act 1981".'
This is a technical amendment. Section 42 of schedule 3 to the Water Act 1945 gives water undertakers wide powers to require separate water service pipes. Clause 4 sets limits to those powers as far as houses are concerned. We need to make it clear in section 42 that the wide powers are subject to the limitations that we are introducing—in other words, subject to clause 4—and that is the purpose of the amendment.

Amendment agreed to.

Mr. Giles Shaw: I beg to move amendment No. 9, in page 4, line 4, after '(b)', insert "'house.'".
This is another technical amendment. The Water Act 1945, from which clause 4 derives, contains a definition of "house" which equates it, in effect, to a dwelling, whether or not inside a larger building. The same definition is appropriate in clause 4—for instance, where the clause speaks of converting houses
into a larger number of houses.
The purpose of the amendment is to apply the 1945 Act definition.

Amendment agreed to.

Bill reported, with amendments.

Mr. Giles Shaw: I beg to move, That the Bill be now read the Third time.
When introducing the Bill on Second Reading I said that in the Government's view it was uncontroversial. I have since had one or two occasions to think that hon. Members have done their best to prove me wrong on that point. However, I am grateful for the way in which the Bill has been handled by Opposition Members. In a large measure, it has proved uncontroversial.
Hon. Members have taken the opportunity afforded by the Bill to raise a number of points which, while perhaps not wholly germane to the Bill's purpose, are nevertheless important in the context of the water industry as a whole—and I include the British Waterways Board in that term. Let me say immediately that I am glad that we had the chance on Second Reading, in Committee and on Report for wide-ranging debates, for it is surely right that the House should have an opportunity to discuss these issues.
This afternoon, however, we must confine ourselves strictly to the substance of the Bill itself—as I am sure, Mr. Speaker, you will confirm. I begin therefore by reiterating that the Bill is short, and deliberately so, because we wish it a speedy passage. Its primary purpose


is to increase the borrowing powers of the British Waterways Board. But we also look upon it as a suitable vehicle by which to tidy up certain anomalies in relation to water supplied for fire-righting purposes, and the power of water undertakers to insist upon separate service pipes to domestic premises. In the course of the Bill's passage through the House we have been persuaded that it would also be appropriate to make provision for an increase in the amount that may be required of a householder towards the cost of installing a supply of water and to impose strict liability upon water authorities for damage caused by burst water mains, which will be done by an amendment in another place.
I commend the Bill to the House.

Mr. Denis Howell: I am grateful for the Minister's remarks about the way in which the Bill has been approached, but I am bound to say that, following the very searching examination in Committee of the effects of clauses 1 and 2, we remain extremely concerned, particularly about the affairs of the British Waterways Board and the situation of the canal system in this country. I therefore have a duty to raise these matters again, because we do not believe that the provisions of clause 1 are adequate in terms of the task of the board in maintaining our canal system.
Our examination of the Bill in Committee also showed that the finances of the board are in an extremely serious state. A parlous plight has been revealed. The board is not able to keep abreast of the collapses that occur in its system and to keep the system open even this year. It is not able to finance itself. In clause 1 the Government propose to allow the board to borrow more and more money, which it is not able to finance. The board does not generate sufficient income even to pay the interest charges on the money that the Government are allowing it to borrow.
As a result of those crazy economics, the Government will have to provide more and more grant each year for the board to finance the increased borrowing that they insist it should undertake.
That is the essence of the situation as revealed in Committee. I think that there can be no dispute about those facts. I draw the attention of the House to the fact that the board has not communicated with us. We have requested information, which its officers have very kindly supplied. I appreciate that. Nevertheless, since the Committee stage there has been no attempt by the board to correct any of the facts that we gave on Second Reading or in Committee. We must therefore now accept those facts as being accurate in every way.
There is a startling and rapidly deteriorating situation with regard to the fundamental viability and organisational position of the board. The board's income is nose-diving. Its expenditure is soaring. More and more canals are collapsing. The board needs to spend more and more money upon essential work, on the inspection of British dams, tunnels and reservoirs, and it is unable to finance that properly.
I must make it clear to the House that the Opposition believe that the canal system has a very important part to play in the heritage, particularly the industrial heritage of this country and, more important even than that, in the provision of amenity and recreation opportunities for our people in the future. We wish to see the canals treated as a viable and going concern.
The Government's response to the situation is in total conflict with all the principles of sound finance and proper economic management. That is certainly true of the Government's expectations of publicly owned bodies, as to the way in which their accountancy should be conducted and returns that it is reasonable to expect. In this case, the Government are allowing the board to increase its borrowing requirement to up to £35 million, £5 million of which is required immediately. The board cannot possibly finance that itself.
To illustrate the board's chronic financial situation one has only to look at the report of the board itself, which shows that in 1977–78—at 1979 figures—it had a trading loss of £13½ million, which in the year 1978–79 increased to £21 million. The losses on commercial waterways in the last year for which we have figures were £7 million, on cruiser waterways £11 million, and on remainder waterways £3¼ million.
The only area of profitability in the whole of the board's accounts is in its warehouse activities. In the last year for which we have figures that profit is stated as £330,000. One is in favour of that, of course, but it is worth noting that in this area the board is not operating as a canal operator. It is using land and warehouse, which it owns because it once had a viable and thriving canal industry, almost entirely for warehousing activities. As I believe we said in Committee, the board seems to own more lorries on the roads than boats on the canals. That is an extraordinary commentary on the situation. If the 1979 figures are added to economic position in this country in 1980 and 1981, it is clear that the position is extremely serious, and it is deteriorating rapidly as a result of the recession. One can only forecast that the accounts for next year and the following year will reveal a situation of even greater concern.
To all this we must add the cost of the board's essential duty to maintain the safety and the fabric of the system. As we know, that was examined by the Frankael inquiry. The auditors state on page 46 of their annual report that the backlog on maintenance alone is £77 million at 1979 prices. That is for essential maintenance work on the canals. To that must be added the cost of remedial action required on the reservoirs that the board owns, amounting to £4·28 million. Therefore on known dereliction and maintenance requirements alone, about £82 million is required immediately.
Moreover, the auditors state on page 46 of the annual report that
Other reservoirs are to be examined and additional liabilities may exist, the extent of which will not be known until the examinations are complete.
One can only assume that means in practice that the "Operation Bridgeguard" scheme, under which the Department of Transport paid for the cost of road bridges over canals, is coming to an end. That was £1·7 million last year. Furthermore, as shown on page 21 of the report, there are permanent weight restrictions on 172 road bridges because they are unsafe to carry the load, and a further 54 are substandard and require urgent attention.
At a conservative estimate, therefore, I judge that well over £100 million is now needed for essential maintenance costs by the British Waterways Board.
The Government's response to that has been to chop off the £5 million per year that the Labour Government provided in 1979 with a guarantee to provide at least a similar sum every year until the backlog of maintenance


had been dealt with, and to take £2½ million out of the board's estimate immediately in September 1979. On our calculation, the sum allocated to the board this year, including an adjustment for inflation—which the Government have put at £29·4 million—is totally inadequate. It needs to be at least £5 million more.
The situation is deteriorating, as the list of closures this year shows. We went into this in detail in Committee. I should like to refer to the eight major closures that are causing great concern to canal users. I notice that the Minister is getting a little agitated. No doubt he will tell us that since our discussions in Committee he has been able to find the money to deal with these eight major collapses and closures, which are affecting all canal users, especially this year. They also affect people who have booked holiday boats as well as the holiday trade generally.
Those eight areas are as follows: the Blisworth tunnel at Oxford; the Wast Hill tunnel at King's Norton, Birmingham; the Stoke Bardolph lock, which is the key to traffic to Nottingham and from there to the North-East and East Anglia; the Leek tunnel in Staffordshire; the Rushall embankment at Walsall; the Netherton tunnel; the Folly Bridge on the Lee navigation; the Foulridge tunnel on the Leeds-Liverpool canal; and the Coombe reservoir in the area of the Peak and Calder canals. That is a formidable list of canal collapses and closures. The Government must deal with them. Under clause 1, one would think that the Government would wish to authorise greater amounts of money for that purpose.
Six reservoirs require urgent attention. On any showing, the British Waterways Board is placed in an impossible situation. That is in contrast to its previous attitudes, particularly under the previous Administration, when public pronouncements were made demanding action which stimulated public controversy and when a Select Committee of the House was urged to make a most radical proposal, with demands that the House should go further.
In spite of all that, and in spite of a worsening situation and a deteriorating financial climate, the board is maintaining what I can only believe to be an irresponsible silence. It is according a silence to this Government which it was not prepared to accord to previous Governments. The board has not sent information to any Members of Parliament, nor has it requested them to raise this matter. There have been no press announcements. There is nothing in the annual report. Had it not been for the Committee stage of the Bill, hardly any of this information would have been made known to those who are interested in the preservation of our canal system.
The Minister told us in Committee—I appreciate his frankness—that 60 per cent. of the board's expenditure is grant-aided from the Government, compared with 30 per cent. 10 years ago. That is the measure of the board's impossibly deteriorating financial situation.
The board has a responsibility to speak out. It should inform the nation, the House, and certainly the canal users about the position. It should ask for even more action. One can only regret its silence.
I now turn to clause 2, which is the other main aspect of the Bill. That is an extraordinary proposal. People who

use water for fire-fighting purposes will not pay for that water, even though, as I said in Committee, they will be paying for the firemen who use the water.
When the Minister said that water supplied for fire-fighting purposes should be free, he made an economically innocent remark—as few things, if any, in this country are free. The water is free only so far as it is rainwater. Its collection and distribution is an expensive business. The Minister means that if certain people are to be relieved of charges for water that might be used in sprinkler systems or hydrants, someone else must pay. One of the great mysteries of life, which we have not yet solved, is the question who will pay.
The Minister said three times in Committee that no extra charge would fall upon the domestic water user. He said that it would fall upon other users in the same class or category. Perhaps I can illustrate what that means. It means that the John Lewis Partnership in Liverpool or Manchester will be relieved of any charge for the supply of water, because it has a sprinkler system. However, that money will have to be found from elsewhere. The North-West water authority estimates that this year the cost will be £600,000. It cost the same last year. Incidentally, the Bill does not take effect until next year, which means that £1,800,000 will have to be found by the North-West water authority if it is to relieve firms such as John Lewis.
If the Minister is right when he says that this money will have to be found from other classes of user, it means the small business man, whom I thought we were all trying to encourage. It will affect the small shop owner—the man who lives above the shop. Because he does not have a sprinkler system he will now have to find the money to pay for the fact that John Lewis and others are to be assisted.
The position is even more crazy than that. John Lewis and other firms get at least 50 per cent. relief on their insurance premiums because they install sprinkler systems. That is quite right. However, when they have such a discount on their insurance premiums for supplying what fire inspectors want them to supply, I do not think it right that they should be given an additional incentive. Personally, I do not think that it is required. If it is, all sorts of legislation can apply. We have fire regulations and fire inspectors, but most important of all we have the Health and Safety Acts, under which an efficient system can be supplied.
I have today been in touch with the North-West water authority. Even though the Minister told the Committee three times that none of this additional charge would fall on the domestic user, the authority has assured me—and has authorised me to tell the Minister and the House—that that additional charge will be imposed, across the board, on domestic users as well as on users in other categories. It says that the total increase in the North-West as a result of clause 2—it will probably apply elsewhere—will be between 1 per cent. and 1½ per cent. on top of the considerable increases in water charges which everyone is now expecting.
I hope that the Minister will undertake to have that matter looked into. Of course, I drew attention to the fact that under clause 2(2) the Minister has the power to make a charge. I assumed that the Minister would make an order that would limit such a charge to small businesses, bad though that would be. At least it would relieve the domestic householder. However, the authority has said "Anything he does cannot possibly come into effect in time to affect our charges this year, and we do not think


that he will be able to draw up such a scheme". I have much sympathy with the North-West water authority, but this is an important matter, which must be cleared up. When such confusion exists in the minds of senior officers of that authority, it can be seen that that is an impossible situation.
I now turn to the question of the general financing of water. We are in an extraordinary situation, in which water authorities have announced their levels of water charges and in which, under this proposal, at least 1 per cent. or 1 ½ per cent. can mow be added even to those charges that have been announced. The Secretary of State referred certain of the regional water authorities to the Monopolies and Mergers Commission.
I received a letter from the General and Municipal Workers Union in Bristol. It referred to Bristol, Bournemouth and West Hampshire. It said that where the monopoly is a private one for the supply of water, and not a public one, is it to be referred to the Monopolies and Mergers Commission as well? I do not expect the Minister to answer that question now, but it is an interesting point that that situation has arisen in the South-West, because of the Bristol Waterworks Company. Treatment should be on all-fours with the public authority.

Mr. Hal Miller: It is my understanding that the East Worcesterhire Waterworks Company has been required to give evidence to the Monopolies and Mergers Commission in the investigation into Severn-Trent. That is the point that the right hon. Gentleman is making.

Mr. Howell: It is far from the point that I am making. The company is to give evidence, but it is not to be investigated. I am sure that the evidencce of the East Worcestershire Waterworks Company, which is tiny but no doubt efficient, would be valuable and should be taken into account. However, it is not being investigated, but is giving evidence in respect of the Severn-Trent investigation. Therefore, where a private monopoly exists, it should be subjected to the same treatment as a public company. I hope that I carry the hon Gentleman with me in that logical proposition.
The confusion to which I was referring has become confounded because the Secretary of State is now sending two senior accountants from a number of illustrious accounting firms to do a two-day job in every regional water authority in the country, because he is concerned about the high level of water charges. What can the Minister tell us about that? There have been some alarming reports to the effect that having sent these senior accountants round the country, two to each water authority, to spend two days on each one—which is not long enough to find out very much—the Secretary of State is now trying to reduce water charges by about 5 or 6 per cent. That can be done only by juggling the books. Therefore, the Secretary of State will shortly announce to the House a change in the system of cost accountancy, as referred to by one of the Welsh Ministers on Welsh water charges, although he put forward a proposal specifically designed for Wales. It might have started out that way, but it seems that the Welsh thinking has flowed into other parts of the country. In their great haste to reduce water charges the Government are about to do another U-turn. They are about to go back en the whole concept of economic cost accountancy and financial targers which have been set for all water authorities.
There has been a lack of information on manpower. On Second Reading the Minister was not able to tell us whether an army of people would be going round the country trying to exempt large firms from charges on water for fire-fighting. It has to be done on the calculation of the number of sprinklers,for example, in the firm. Some method must be used. What will be the admimistrative requirements of a scheme that involves going round the country assessing the likely cost of effective sprinklers and hydrants in industry and commerce? We should be given information about that.
Clauses 1 and 2 may be necessary, but we are profoundly concerned about them, their causes and their implications. Although we shall not vote against the Third Reading, I assure the Minister that when he makes further orders, and when other opportunities occur, we shall return to these fundamental questions of policy involved in the matters that I have felt right to raise on Third Reading.

Mr. Tony Marlow (Northampon, North): I am very pleased to follow the right hon. Member for Birmingham Small Heath (Mr. Howell). It is a bit like following Geoffrey Boycott. Although one can sit with one's pads on for quite a long time waiting to go in, it is always surprising when he is out.
There is much in the Bill that is good, and that I am keen on. It has much to commend it. But the right hon. Gentleman raised an important point. That is the question of charges to domestic rate payers. Before voting on the Bill, I should be grateful if my hon. Friend could give me some reassurance on this issue.
As yet, there is nothing to deal with the extortion racket, which makes the Cosa Nostra seem like a kindergarten in comparison. That in the uninhibited bankrolling powers of the water authorities. This must be the most blatant form of taxation without representation since the days of feudal dues. No only is it blatant, but the way in which they are viciously and violently extracted—if my local paper is anything to go by—makes he tax gatherers of the sheriff of Nottingham seem gentle and humane by comparison. This is a highly undemocratic way in which to go about things. There is no democratic or adequate organisation which at this time would be offering its workers 10 per cent., when the wealth-producing part of the nation can only afford 7, 8 or 9 per cent. There is no group of workers which would be demanding more than 10 per cent. at such a time, unless the organisations for which they were working had this arbitrary power of extracting money with menaces from the people of this country.

Mr. Denis Howell: On a point of order, Mr. Speaker. I should be glad to ask for your guidance. The hon. Member is talking about wage negotiations leading to a possible strike in the water industry. Had I thought that that was in order, I would have made a considerable speech on the matter, which is of major importance. I should be grateful if you would let me know if this speech is in order on the Third Reading of the Bill?

Mr. Speaker: I am grateful to the right hon. Member. As he will see, I was occupied reading some notes. The hon. Member for Northampton (Mr. Marlow) will take the point that it is not in order to pursue that line.

Mr. Marlow: I accept that, Mr. Speaker. I am moving on to something else immediately. I thank the right hon. Member for bringing the point to my attention.
I was talking about the water charges and the effects that the Bill might have on domestic water rate. The domestic water rate is the most hated aspect of the whole of the hated rate system in this country. The Government have a long-term commitment to get rid of the rating system.
The Government should make a start by ridding us of this grotesque due, this unfair tax and unacceptable tribute which we suffer now. If one looks in any neighbourhood, there may be a large house which might be occupied by a little old lady. Why should she not occupy it? She has lived there for the whole of her life and she has brought up her family there. That is her house and why should she move. She is charged not according to the amount of water that she consumes but according to the rateable value and size of her house, whereas the house next door might be half the size. There may be three adults in the family living there, with three cars, washing machines—all the gadgetry of modern life. They may be heavy consumers of water. The time must surely come when the charging of water is based on the consumption of water.
It has been suggested that we should go to a system of meters. It would cost £40 per household to do that. for 15 million houses it would cost £600 million merely to fit the meters. that money would be wasted. We would also have an army of peaked-capped officials knocking on doors day by day to read the meters and an army of bureaucrats and accountants sending out bills and making sure that they were paid. Water is not like gas or electicity. The cost of the water used is tiny in comparison with getting the water to the premises. Metering is not the solution.
How much money is involved? Last year domestic water rates raised £480 million. It is hardly for me to say how the Government should raise the money. However, 1 per cent. on VAT would raise far more money than is currently raised by domestic water rates. Would that not be a fairer way of financing the supply of water to domestic households? After all, the person who buys a car and washes it or buys a washing machine and washes his clothes in it is the person who uses the water. Why should he not pay for his water through his purchases? It would be far more satisfactory than the current arbitrary rating system, which is so unfair.
I am in some difficulty about the Bill. Can my hon. Friend take account of my remarks and give us some hope, and the country some hope, that the vicious and officious system of charging for the water supply can be knocked on the head without too much delay?

Mr. Giles Shaw: With permission, Mr. Speaker, I shall reply to some of the points made in this brief Third Reading debate.
I recognise the robust way in which my hon. Friend the Member for Northampton, North (Mr. Marlow) sought to tackle the problem of water charges. I concede that the present system, which is widely based on rateable value as the foundation for charging, is clearly not one that commends itself to the consumer, the water authorities or the Government. It is widely recognised that it causes distortions. However, let me say two things.
We have to move gradually to systems that are more equitable. Many others do not feel like my hon. Friend.

They support the move to metering as one way in which the consumer can control at least the volume, if not the price per gallon used, of the water that comes to the domestic user. Most water authorities are beginning to move in that direction by offering consumers a choice. The choice is important. In many cases the consumer may not wish to move away from the rateable value system. The National Water Council has certainly been asked to examine the matter and has published a consultative paper about charging for water. It is a matter that is exercising all concerned. However, I shall disappoint my hon. Friend by saying that I am not too attracted by the idea of value added tax being used, region by region, in connection with water supply, although I understand that the source of complaint is the fundamental point about rateable value.

Mr. Marlow: I was suggesting that the change should be part of the total VAT. One point that is important is that that would have no differential effect on the RPI. Water would be charged for either through VAT or the domestic rate.

Mr. Shaw: I accept my hon. Friend's point, but we are here considering the extent to which water authorities operating within regions and in control of the system for fresh water, sewage disposal, pollution and many other amenities should be enabled to charge within their regions and to offer themselves, as it were, for service in that region rather than as part of the national undertaking.
The right hon. Member for Birmingham, Small Heath (Mr. Howell) spent a considerable time referring to his major concerns about the British Waterways Board finances. I understand his anxiety. None of us can get away from the fact that, as he puts it, with a falling income and increased costs the present position of the board is far from satisfactory. It is likely to continue in that semiparlous state for a considerable time.
However, I assure the right hon. Gentleman that despite the economic restraints under which we are all operating the. board has had a stable grant in real terms in the past two years and that as soon as we can arrive at an economic condition that will allow it we would expect to move to a grant-aided system that had a number of years attached to it. As I fully concede, it is necessary for the authority to have some continuity in its income in order to tackle the backlog of maintenance.
Although the British Waterways Board has problems in relation to the canal system, it is still working hard to try to deal with the matter, despite financial stringency. The right hon. Gentleman rather suggested that anyone who booked a holiday with the authority to use the canals would run into a pile of rubble at the end of the first bend. That is not quite the case. I want to make it clear that in some of the matters in which the authority is engaged real progress is being made.
The board is discussing the priority with which it will tackle urgent cases. The right hon. Gentleman listed a number of them. It is hopeful that Wast Hill tunnel, Rushell embankment, Old Loop, Tividale, and Stoke Bardolph lock will be reinstated for passage during 1981. It is anxious to make progress with the Blisworth tunnel. However, I am not prepared to forecast at this point the reopening date. The board is considering what temporary arrangements can be made to allow passage through the tunnel during the coming season. I want to reassure anyone


planning a canal holiday that the board will do everything in its power to see that he has a pleasant journey afloat and ashore.

Mr. Denis Howell: Will the hon. Gentleman give way?

Mr. Shaw: I suppose that courtesy demands it.

Mr. Howell: if the Minister wants to ensure that people booking holidays on the canal system get the fullest information to which they are entitled, he should give way. He has not given way with good grace, which is unusual for him.
The Minister tells us that out of the eight closures the board hopes to put right four, some time this year. He cannot tell us when.
I wish to deal with the publicity for which the board should be responsible. Holidaymakers and people in the boat industry are entitled to know the position. The board should be much more forthright in its publicity. No one should have to plan holidays that may be spoilt. I am sad that until now the board has not seen fit to take responsibility for giving that elementary but essential information to potential holidaymakers.

Mr. Shaw: The right hon. Gentleman makes a fair point. There will obviously be anxiety for those who may not know which of the canals will be reopened during the 1981 cruising season. However, I remind the right hon. Gentleman that the four stoppages to which I referred will be reinstated—that is, reopened during the 1981 cruising season.
I take the point that it will be necessary for the board to keep fully informed about the canal system those involved in the holiday business and their customers. In the holiday business at home and abroad it is not unknown for difficulties to occur. There is a lack of information about many forms of package holiday. It is not a direct reflection on the management of the Britih Waterways Board or the system over which it presides that it is perhaps a little more reticent than the right hon. Gentleman would wish.
I turn now to the other points that the right hon. Gentleman raised in connection with the other parts of the Bill. I refer particularly to clause 2, in respect of which he was at pains to suggest that the domestic consumers in the North West authority area would be faced with a massive impost on their bills as a result of the Government's decision to follow the advice of Mr. Len Murray and remove the tax on safety, which was involved in the sprinklers standing charges. The right hon. Gentleman suggests that he has more recent information than I was able to give the Committee. I assure him that I shall look closely at the information that I have been given. If I am incorrect and have misled the Committee and the House, I shall naturally apologise.
My understanding, on the facts of the case, is that the loss of income in the North West water authority area,

which is due to the removal of the significant standing charges imposed upon fire sprinklers and other forms of fire equipment in that area, will be reimbursed to the authority through the same measured sector whence it came. This means that there will be a small increase in the charges of all those in that area operating on the metered system.
The right hon. Gentleman went further. He said that this would involve the domestic user and that the charges to be recovered—he quoted £600,000 as the sum raised through this charge at the moment—would result in an increase of 1 per cent. or more on domestic bills. The information before me is a letter from the North West water authority. In so far as we expect metered consumers in the North West to have to bear the results of the withdrawal of the particular charge on fire fighting equipment, then the domestic consumer is virtually not affected. I was asked how many domestic consumers are expected to receive a metered supply at the start and at the end of the year. The answer is none at the start of the year, and possibly 500 at the end of the year.
On the actual facts of the numbers of metered consumers from the domestic sector, who could be involved in this modest increase in cost, the answer is that there is none at the moment and there could be as many as 500 at the end of the year.
The right hon. Gentleman went on to suggest that this charge could be 1 per cent. or 1 ½ per cent. I remind him that the amount involved is of the order of £600,000. I know that we are agreed on that. It has been the case for one or two years. I must equally remind him that the total income involved in the North West water authority area is £233,882,000. If he takes 1 per cent. of that—I can see from the winking eye and the flashing mind that he has already done so—it will be found that the figure is £2,338,820. He will suddenly compare that with the £600,000 that this whole operation costs. He will conclude that his sums, like so much else about the right hon. Gentleman, do not add up.

Mr. Denis Howell: They are not my sums.

Mr. Shaw: The right hon. Gentleman must restrain himself. He has involved the House in what might be called a PhD thesis on the matter, a pretty hefty dialogue, if I may so describe it. It is high time that this little matter was put to rest. Domestic consumers in the North West water authority area should sleep sweeter tonight if only for the fact that they will not be faced either with a 1 per cent. increase in their rates or with 1 per cent. of the authority's total charges, even though the right hon. Gentleman would clearly wish it to be so.
We come, therefore, to the end of this short debate. I recognise that this is a short Bill, which has occupied the House for a long time. A short Bill and a shortened Minister must surely resume their seats. I welcome the opportunity of committing the Bill to its Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — House of Commons Members' Fund and Parliamentary Pensions

Order for Second Reading read.

The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): I beg to move, That the Bill be now read a Second time.
The Bill has two main purposes. The first and, I think the House will agree, the most important, is to provide hon. Members who left this House before 16 October 1964 with grants from the Members' Fund. These former hon. Members had no opportunity to contribute to a pension scheme, or to benefit from one. Many are getting on in years and some now find themselves in difficult circumstances. This is a state of affairs which I know has been a source of anxiety on both sides of the House for some time. In the debate on the 1978 Parliamentary Pensions Bill, I said from the Opposition Benches:
hon. Members who retired by 1964 without any pension are among the hardest hit members of the community."—[Official Report, 21 June 1978; Vol. 952, c. 623.]
I know that this view is widely shared in the House. I am therefore glad to bring forward this Bill now, especially the proposals contained in clauses 1 to 3. The root of the problem is that the existing parliamentary pension scheme, which took effect from the time of the general election in 1964, makes no provision for those whose service ended before its introduction and who therefore had no opportunity to contribute to it. The principle of no restrospecton may sometimes seem a hard one. It is a fundamental feature of pensions practice that still affects hundreds of thousands of would-be pensioners in the public service and many in the private sector. Successive Governments have accepted that they could not justify an exception in the case of our own former colleagues.
Despite reviews of the pension scheme by the Top Salaries Review Body in 1971 and 1976, which confirmed existing arrangements, the position of pre-1965 Members has nevertheless continued to give rise to concern. Accordingly in 1978, the then Prime Minister invited the Top Salaries Review Body to reconsider this question. In February last year the review body, in its thirteenth report proposed a way forward based on the House of Commons Members' Fund. This is at present primarily a benevolent fund supported by an annual contribution of £24 by hon. Members and a £15,000 a year grant from the Exchequer.
The review body suggested that the solution was to establish new grants to be paid as of right from the Members' Fund to pre-1965 Members. This was a valuable proposal because it reconciled the principle of no retrospection with recognition of past services, regardless of need. On 14 February, last year, my predecessor told the House that the Government accepted in principle the review body's proposals and would introduce the necessary legislation. I feel sure that the proposed grants will be welcomed by the House today.
I shall describe briefly the main features that we are proposing. Clause 1 sets out who will be entitled, on application to the trustees, to the new grants. The grants will be payable to former Members with at least 10 years' service—even if that service was interrupted—who left this House before 16 October 1964 and to their widows and dependent widowers. There are three main conditions to

be satisfied set out in the clause. It would perhaps be for the convenience of the House if I were to draw attention at this stage to the Government's amendments to clause 1. There are a good many pre-1965 Members whose service falls just short of 10 years, notably those who were in the House from 1945 to 1955 or from 1955 to 1964. The trustees of the Members' Fund have expressed their concern that these former colleagues will not qualify. Unfortunately, I have to say that a general reduction in the qualifying condition would be a prohibitively expensive way of dealing with it. It is possible, however, that fewer than anticipated of those with the required service will come forward and that would leave some slack in the fund. The Government amendments that I shall move formally later enable the trustees to go below 10 years in exceptional cases if the Government Actuary advises that such slack exists. This gives the trustees an additional measure of flexibility, which I believe they will welcome.
Clause 2 sets the level of the new grants at £1,000 a year to pre-1965 Members and £500 a year to their widows or dependent widowers. It provides for this House to vary the level of grants by resolution in the same way that we vary the existing limits on discretionary payments from the Members' Fund. It also makes clear that in assessing any additional discretionary grant, the trustees of the fund must take into account any payments being received from the fund as of right. In order to build up the fund to meet these new grants, the Government will be increasing their present contribution by £200,000 in each of the next 10 years.

Mr. Paul Dean: Although I warmly welcome this long-overdue reform of provision for our former colleagues, will my right hon. Friend give an assurance that the Government intend to use the powers contained in clause 2 to bring forward a resolution to vary and to increase the rates offered? The House will appreciate that a pension with no provision for increase against inflation is of no real value. I hope that my right hon. Friend can assure the House that the review will be regular, and preferably on an annual basis.

Mr. Pym: I am grateful to my hon. Friend for those remarks. The provision is there to be used. Although no interval is specified, I am sure that my hon. Friend will accept that we intend to make a review from time to time. The power to vary the rates of payment by resolution is consistent with the existing power under section 3 of the House of Commons Members' Fund Act 1948 to vary the limits on discretionary payments. We shall follow that same pattern.
The Government will make £200,000 available in each of the next 10 years. In all, we shall make £2 million available to assist pre-1965 Members of Parliament. That seems to us to be generous provision, and I hope that the House agrees. Clause 3 is a technical provision that will exclude the additional Exchequer contribution to the fund from the normal requirement that one-tenth of the fund's income be diverted to a separate special hardship fund. Clearly, that would be inappropriate in view of the additional funds that clause 2 will make available.
The second main purpose of the Bill is to make it easier for pension rights earned by hon. Members in outside employment to be transferred into the parliamentary pension scheme. In the same report in which the Top Salaries Review Body recommended the payment of


grants as of right to pre-1965 Members of Parliament, a quite separate recommendation was made urging greater opportunity for participants in the parliamentary pension scheme—whether hon. Members or office holders—to transfer into the scheme pension rights that they had earned in outside employment.
At present such options may be exercised only within 12 months of first joining the pension scheme. A time limit is necessary to safeguard the financial stability of the pension fund, but the present limit means that hon. Members have no opportunity to review their pension position as their careers progress. The existing rules also mean that hon. Members who return after a spell outside the House have no second opportunity to transfer pension rights earned in the meantime.
The review body recognised those problems in its thirteenth report. It suggested extending the option period to five years, and drew attention to the desirability of a further option on appointment as a Minister. The Government have considered this question, and propose an arrangement that will provide hon. Members with the greater flexibility appropriate in view of the exigencies of a parliamentary career. It is something of an improvement on the review body's suggestion.
Clause 4 provides that there will be a 12-month option period on becoming a Member of Parliament, whether for the first time or after a break. There will be a similar option on becoming a Minister or other office holder, whether for the first time or after a break.

Mr. Robert Taylor: Does that mean that a new Member of Parliament or a former Member of Parliament who returns to the House can bring in funds from a non-index- linked pension fund, put them into the fund and receive index-linked benefits?

Mr. Pym: Different circumstances apply to different pension schemes. However the essense of the matter is that the person will be: able to bring into the scheme the pension that he earned previously, whether on the first occasion that he came into the House or on the second. I should need notice if I am to give my hon. Friend an accurate reply about index-linking. However, I shall advise him on that point.

Mr. Nick Budgen: Surely the person would uncash the first set of funds and buy benefits in the House of Commons fund. As my hon. Friend said, those benefits would be indexed.

Mr. Pym: I think that that is right, but I should wish to be sure before giving any commitment. In addition, there will be a once-and-for-all option from the passing of this Bill, so that current Members of Parliament and office holders may benefit fully from the new arrangements. The retention of 12 months as the length of each option period will ensure that the financial position of the parliamentary pension fund is safeguarded. By the same token, there should not be any effect on the Exchequer contribution to the fund, as it is a question of transferring rather than creating pension benefits. These clauses rationalise the position.
I cannot and should not conclude without thanking Lord Boyle and his colleagues on the Government's behalf for making the recommendations that have led to this Bill. They have come up with two very helpful and sensible proposals and although they affect only a few people, they

will be warmly appreciated. I feel sure that the whole House will be grateful to them, and I commend the Bill to hon. Members.

Mr. Charles R. Morris: I welcome the Bill and I endorse the appreciation expressed by the Leader of the House to Lord Boyle and to the members of his commission for the recommendations that led to the formulation of the Bill. I couple the appreciation felt by this side of the House for their work with an expression of appreciation of the work carried out consistently over the years by Mr. John Wilkin, the accountant in the Fees Office and Mr. Dobson, and their colleagues for their devoted work on pensions on behalf of those who have served this House, and their dependants.
As the Leader of the House implied, the Bill gives effect to the recommendation contained in report No. 13—Cmnd. 7825—of the Boyle commission. It was recommended that hon. Members who left the House before the introduction of the present pension scheme should be entitled to grants from the fund as of right. Prior to 1964 there was no parliamentary pension scheme as such. The Bill provides justice to those who served their constituents and this House prior to 1964. However, it provides a qualified justice. I was very taken by the point made by the hon. Member for Somerset, North (Mr. Dean), when he rightly referred to the provisions contained in clause 2.
If hon. Members address their minds to clause 1 they will notice the provisos that have to obtain before the sums of £1,000 and £500 become payable. Indeed, the individual must have completed 10 years parliamentary service prior to 1964 and have attained the age of 65 or, as a result of mental or bodily infirmity, be incapable of earning his living.
Those qualifications must be met before an individual receive a pension of £500 or £1,000 per annum. In the context of 10 years' parliamentary service, £1,000 means a mere £2 a week for each year of parliamentary service. For the widow, £500 can be analysed as a mere £1 a week for each year of parliamentary service.

Mr. Nicholas Baker: I was interested when the right hon. Gentleman spoke about justice. I fully understand the extent of service that former hon. Members have given. Nevertheless, can the right hon. Gentleman give some parallels for what seems to amount to retrospective remuneration—well deserved as it is?

Mr. Morris: One cannot qualify justice by drawing parallels with situations that are not wholly equal. The parliamentary scheme did not exist prior to 1964. It has had a very limited life. Many retired Members are now living in straitened circumstances. It is, therefore, no more than justice that we should make this minimal provision to help those who do not qualify for parliamentary pension as such.

Mr. Paul Dean: Does not the hon. Gentleman agree that another important factor that should be borne in mind is that those of our colleagues who served both before 1964 and after 1964 were allowed to count their pre-1964 service for pension purposes? That adds to the desirability, as my right hon. Friend said, of providing modest assistance to those who retired in 1964.

Mr. Morris: I agree with what the hon. Member for Somerset, North says. He makes a valid point.
While I am somewhat critical of the scale of provision in clause 2, I recognise that the Bill helps Members with interrupted parliamentary service. I welcome the improved transferability arrangements. I welcome, too, the proposals relating to the buying of added years. But those two proposals will affect Members in a variety of ways.
The proposals sound attractive if a Member has something to transfer into the fund. The prospect of buying added years is attractive if one has the financial wherewithal to buy the added years. Some Members come from areas of activity and occupations where pensions either do not exist or are extremely poor. One can almost apply a rule of thumb to pension schemes in the private sector, certainly schemes for manual workers, who are well represented on the Labour Benches. The more muscle that the occupation requires, the worse the pension scheme will be. The former pension arrrangements for the coal industry and the pension arrangements for the steel industry and British Rail are by no means over-generous in the context of transferability or buying added years. Buying added years may produce a situation in which an individual Member has to pay in excess of £2,000 for each added year that he or she may wish to purchase. However, I welcome the proposals in this regard.
I should like to put one or two questions to the Leader of the House about the Bill as a whole. He rightly referred to the problematical take-up of the Bill. The explanatory and financial Memorandum, under "Financial Effects of the Bill", talks about expenditure of £200,000. But as far as I am aware, there is no list of former Members in the fees office. How will former Members who qualify under clause 1 know that this provision is to be made available? I believe that that will constitute a practical problem.
I hope that the Government will interpret generously the amendment standing in the name of the Leader of the House for those Members who have less than 10 years' service—assuming that the amendment is carried, as I hope will happen. Those who have served the House are entitled to a minimum recognition for pension entitlement, if they are pre-1964 Members.
I should also like to know what provision will be made to improve the figures of £1,000 and £500 in clause 2. Will the figure be subject to some form of indexation, or will it be varied from year to year?
In conclusion, I should like to express my appreciation once again to the Boyle commission; and I hope that the Bill will receive a Second Reading.

Mr. Edward du Cann: I rise only to make some brief remarks. First, I thought that the right hon. Member for Manchester, Openshaw (Mr. Morris) did extremely well to take for his opening sentences words of praise and gratitude for the servants of this House. It is undoubted that we are devotedly served by a team of people whose loyalty is matched only by their conscientiousness. They are not always remembered. It is appropriate, in discussing either our own conditions or the conditions and pensions of those who have been Members of the House in the past, that we should remember with gratitude also those who do so much for us in so many ways.
My right hon. Friend the Leader of the House was entirely right—here he was joined by the right hon.

Member for Openshaw—to pay tribute to an old friend of many of us on both sides of the House—Lord Boyle—whose conscientiousness in public service has been a characteristic of the whole of his working life. I am sure that all of us wish him well at present and always.
Thirdly—here I come to the main point that I want to make—we should express to the new Leader of the House—if I may so describe my right hon. Friend—our gratitude for having introduced this measure. We can argue whether the figures are correct, whether they should be considerably larger or marginally larger, or whether it is done in quite the right way, but at last we have this Bill. As the right hon. Member for Openshaw said, it is a matter of justice that it should be introduced. I am delighted that it is my right hon. Friend, with all his experience of this place and his feeling for it, who has the task of laying it before the House today.
All of us in our parliamentary experience are well accustomed to being asked for services of one sort or another in our constituencies and elsewhere. We are very often asked for services, but, if we render those services, it is not always that we are happy recipients of thanks afterwards.
As one who has pressed—and pressed very hard—successive Leaders of this House, successive Leaders of the Opposition and Prime Ministers for a long-overdue reform of this kind, I express my gratitude that at last we have it. It is greatly appreciated. It is something that the Parliamentary Labour Party and the 1922 Committee together sought to achieve, aided most strongly by Opposition spokesmen, including the hon. Member for Islington, South and Finsbury (Mr. Cunningham). It is appropriate now to say "Thank you" when at last, after a very long struggle, we have a measure which is, in truth, somewhat overdue.
The other characteristic of the Bill on which it is appropriate to comment is the introduction of the principle of transferability. I hope very much that one of the reforms to which the present Government will give much time in due course will be the opportunity for a greater degree of transferability of pensions in the private sector. The fact that this is a matter of practical difficulty very often inhibits a man from moving from one responsibility to' another, and our national life is the poorer as a result. It is entirely appropriate that Parliament, in its own affairs, should be setting an example.
We all know of old colleagues of ours in the House— without going into the matter in any detail—for whom the new measure, if the House in its wisdom decides to pass it, will bring pleasure and some substantial relief. With that practical and important effect of the Bill in mind, and the benefit that it will bring, I reiterate my thanks to my right hon. Friend.

Mr. Robert Taylor: There can be no hon. Member who would dissent from anything that has been said concerning the Bill as it affects our former right hon. and hon. colleagues who were here before 1964. There must be a unanimous view on that part of the Bill. But there cannot be a unanimous view on clause 4, which relates to the present position.
When I intervened in the speech of the Leader of the House he appeared to be unsure whether anybody could transfer into this scheme from a non-indexed linked


pension and get the benefits of index-linking. In a situation in which my right hon. Friend is uncertain, I must assume that one can do so.
Whatever my right hon. Friend the Member for Taunton (Mr. du Cann) says about transferabiity in the private sector, it is a very serious matter if people from the private sector can come into the public sector towards the end of their career, transfer their pension rights into the public sector, and be index-linked.
According to press reports, there has been considerable discussion in the Cabinet about the Scott report. There has also been a difference of view. Here we are endeavouring to extend the index-linked system for the benefit of ourselves, as hon. Members, and I do not think that I can willingly agree to such a proposal.

Mr. Michael English: Will the hon. Gentleman give way?

Mr. Taylor: Not at the moment. I represent about 55,000 constituents. Of that 55,000, probably 5,000 are in the public sector, because my constituency happens to be near to the centre of London. That means that the other 50,000 are carrying the burden of the 5,000 who are index-linked.
I do not believe that there are any index-linked pension schemes in the private sector. Today we are asked to agree to a Bill which allows us—

Mr. English: On a point of order, Mr. Deputy Speaker. Were the measure applicable to ourselves, the hon. Gentleman would be out of order. It is applicable to people who have retired from this House before 1964.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): The hon. Gentleman will be able to make his point, if he desires to do so, at a later stage.

Mr. Taylor: As the short title of the Bill is "House of Commons Members' Fund and Parliamentary Pensions Bill", I believe that I am quite in order in talking about parliamentary pensions. As clause 4 refers to transferabil-ity, I believe that I am in order there as well.
It is quite wrong for us to perpetuate a privileged position for hon. Members of this House, therefore I regret that, while I agree with much of what has been said by my right hon. Friends, I cannot support a Bill which allows transferability into a fund which is index-linked, and I shall vote against the Bill.

Mr. Michael English: I hope that nobody will take much account of the last remarks of the hon. Member for Croydon, North-West (Mr. Taylor), because the basis of the Bill is to provide some remuneration to those who retired from the House of Commons before 1964—and, of course, their widows. Presumably, they may have some other dependants, such as people who are physically disabled.
I should like to ask the Leader of the House a very simple question. Before 15 October 1964 the salary of Members was very small. What would be the present pension of a civil servant who retired before 15 October 1964 if that civil servant, on his retirement, received the same salary as a Member of Parliament at that time?
What 1 am asking, in other words, is this. If we are to give this small sum of £1,000 to former Members, or £500

to their widows, how will that compare with the sums that we are giving currently to civil servants who retired at the same time on the same salary?

Mr. Pym: I thank the right hon. Member for Manchester, Openshaw (Mr. Morris), my right hon. Friend the Member for Taunton (Mr. du Cann) and other hon. Members for the very kind things that they have said about the Bill and the welcome that they have given to it. That is a matter of satisfaction for the House. It shows that hon. Members are pleased that we are introducing the Bill now.
I say to the right hon. Member for Openshaw that it will be noted by the trustees that in his view the amendment, if carried, ought to be interpreted generously by the trustees. I have no doubt that that is so.
I am not sure whether there is a list of former Members, but I know that the trustees, before the Bill was ever contemplated, gave a great deal of thought to how assistance could be brought to pre-1965 Members. It is largely on the basis of their thinking and the thinking of the review body that the arrangements now provided in the Bill were made. Nobody suggested, in the course of those discussions, that the difficulties that the right hon. Gentleman raised would be paricularly acute. I assume, therefore, that they are manageable.
I am not able, off the top of my head, to give the hon. Member for Nottingham, West (Mr. English) the comparative figures for a Civil Service pension for somebody who retired at the same rate of pay as a Member of Parliament. I shall certainly convey them to him later.
I have to tell my hon. Friend the Member for Croydon. North-West (Mr. Taylor) that at the moment it is possible to buy index-linked pensions by means of a transfer. If one is transferring in from a non-indexed linked scheme, one buys, as it were, fewer years, but at any rate one is able to do it now. The purpose of the Bill is to extend that provision so that someone who returned to the House for a second time would be able to bring into the scheme provided in the Bill any benefits that he may have had from a pension scheme while he was out of the House. The trustees recognised the anomaly, and we seek in the Bill, among other things, to put that right.

Mr. Leslie Spriggs: Mr. Leslie Spriggs (St. Helens): rose—

Mr. Pym: I will give way in a moment. My hon. Friend adverted to the Scott report and the whole principle of index linking and indicated his opposition to that concept. That is a matter that is now a public debate as a result of the publication of that report. In due course, no doubt, we shall debate the principle of it here. If there were to be a fundamental change in index linking no doubt it would affect all hon. Members. We are not trying to make any special arrangements for index linking. We are simply trying to fit into the existing system arrangements that will suit Members not now covered.

Mr. Robert Taylor: My right hon. Friend said that it was to enable Members who had recently arrived, or who had come to the House for a second time, to benefit. Surely clause 4 gives existing Members the ability to tot up the scheme and to increase the index-linked benefits which are available to every existing hon. Member, whether he has recently arrived here or not. This is something to which I strongly object.

Mr. Pym: Yes. It will give an hon. Member who sits continuously a new 12-month option on first appointment as a Minister and again on reappointment after a period on the Back Benches. It makes that change.

Mr. Spriggs: My hon. Friend the Member for Nottingham, West (Mr. English) put a very pertinent point. The object of this question is that it shall be seen that there is fair play. He asked what a civil servant's superannuation would be if he were drawing the same salary as a Member of Parliament in 1964 and retired at the same time. What is his income as a pension now?

Mr. Pym: Amongst other things it would depend on the length of service of the civil servant concerned, but I will write to the hon. Member on that point.

Mr. George Cunningham: On the previous point, will the Leader of the House stress the second point which he made a moment ago, that if a person brings non-index-linked entitlement into the Members' scheme which is index linked, he will not get the same number of years in that second scheme as he was entitled to in the first. That is surely the answer to the hon. Member for Croydon, North-West (Mr. Taylor).

Mr. Pym: I am grateful to the hon. Gentleman. That is indeed the position.

Mr. Alfred Morris: It was a clear implication of the speech of the hon. Member for Croydon, North-West (Mr. Taylor) that Members of Parliament were doing rather well for themselves. Will the Leader of the House remind the hon. Member of the case of a member of the European Assembly whose widow received a pension of £12,000 in respect of one year's service by her late husband? It is not good enough for the hon. Gentleman to give the impression that Members of this House are doing very well in comparative terms.

Mr. Pym: I think that we ought not to bring the European Parliament into this, if I may say so. This is a much narrower Bill. I think that I made an appropriate comment on the view which was expressed by my hon. Friend—a view that he was entitled to express, whether anybody else agrees with it or not.

Mr. English: I am grateful to the right hon. Gentleman for his usual courtesy. He has allowed several interventions. I am happy to accept the comparison of the same number of years of service of the civil servant with the Member of Parliament. I am sure that the right hon. Gentleman will appreciate that the fact that he did not instantly know the comparison shows that no comparison was made in putting his brief before him. That is highly relevant to the question that we are coming to shortly, namely, the number of years that civil servants serve in order to get their pensions improved, as distinct from those served by Her Majesty's judges and Members of Parliament.

Mr. Pym: Of course, different circumstances apply. It is not possible to give an absolute comparison unless one makes certain assumptions. I will write to the hon. Member and clear up that point.

Mr. Frank Hooley: I am sorry for the enormous number of interruptions which the right hon. Gentleman has had. If I understand the preamble correctly, the Bill will confer possibly new rights on every Member

of the House at present because a new option can be exercised within 12 months of the Bill's being passed. Therefore, every present Member of the House could in certain circumstances benefit from this Bill.

Mr. Pym: Yes; if in their circumstances they judge that it is to their advantage, it would be possible. I think that that is the sum total of the points which were raised.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.— [Lord James Douglas-Hamilton.]

Bill immediately considered in Committee.

[Mr. Bryant Godman Irvine in the Chair.]

Orders of the Day — Clause 1

RIGHT OF CERTAIN PAST MEMBERS AND WIDOWS OR WIDOWERS OF SUCH MEMBERS TO PAYMENTS OUT OF HOUSE OF COMMONS MEMBERS' FUND

Mr. Pym: I beg to move amendment No. 1, in page 1, line 7, after 'eligible', insert 'or treated as eligible'.

The First Deputy Chairman: With this amendment we may take Government amendment No. 2.

Mr. Pym: I thought that it was for the convenience of the Committee to refer to the purpose of the amendments in the course of my Second Reading speech. To summarise them, they enable the trustees to go below 10 years in exceptional cases if the Government Actuary advises that adequate scope exists in the fund so that borderline cases, to which the right hon. Member for Manchester, Openshaw (Mr. Morris) referred in his Second Reading speech, could have some measure of support where the trustees judge that appropriate.

Amendment agreed to.

Amendment made: No. 2, in page 2, line 25, at end insert
'(5A) The Government Actuary shall, if the trustees so request, make to them and to the Treasury a report estimating—

(a) on such information as the trustees are able to supply; and
(b) on such assumptions as to the amounts of the annual contributions under section 1 of the House of Commons Members' Fund Act 1957 as appear to the Government Actuary appropriate after consulting the Treasury,

the number (if any) of past members or their widows or widowers to whom payments under this section could be made, in addition to payments to persons eligible to receive them, without affecting payments under section 1 of the House of Commons Members' Fund Act 1939; and if the trustees, in special circumstances, see fit to do so, they may, within the limit of the numbers so estimated, treat persons as eligible to receive such payments who would be so eligible but for the fact that the periods of service of the past member concerned amount to less than ten years.'.—[ Mr. Pym.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

Orders of the Day — Clause 4

TRANSFER FROM OTHER PENSION SCHEMES

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 192, Noes 8.

Division No. 77]
[6.58 pm


AYES


Alexander, Richard
Atkins, RtHonH.(S'thorne)


Ashley, Rt Hon Jack
Atkins,Robert(PrestonN)






Atkinson, David (B'm'th,E)
Hardy, Peter


Beith, A. J.
Harrison, Rt Hon Walter


Benn, Rt Hon A. Wedgwood
Haselhurst,Alan


Benyon,Thomas(A'don)
Havers, Rt Hon Sir Michael


Berry, Hon Anthony
Hawkins, Paul


Best, Keith
Hayhoe, Barney


Bevan, David Gilroy
Haynes, Frank


Biffen, Rt Hon John
Healey, Rt Hon Denis


Blaker, Peter
Henderson, Barry


Booth, Rt Hon Albert
Heseltine, Rt Hon Michael


Boscawen, Hon Robert
Hooley, Frank


Boyson, Dr Rhodes
Hooson, Tom


Bright, Graham
Howe, Rt Hon Sir Geoffrey


Brittan,Leon
Howell, Rt HonD.(G'ldf'd)


Brown,M.(BriggandScun)
Hunt, David (Wirral)


Bryan, Sir Paul
Jessel, Toby


Buchanan-Smith, Alick
Jopling,Rt Hon Michael


Buck, Antony
Joseph, Rt Hon Sir Keith


Campbell-Savours,Dale
Kaufman, Rt Hon Gerald


Carlisle, Kenneth (Linconl)
Kerr, Russell


Carlisle, Rt Hon M. (R'c'n)
Kilfedder, James A.


Chalker, Mrs. Lynda
King, Rt Hon Tom


Clarke, Kenneth (Rushcliffe)
Lamond, James


Cocks, Rt Hon M. (B'stol S)
Lamont, Norman


Cohen, Stanley
Lang, Ian


Colvin, Michael
Lawrence, Ivan


Cope, John
Lawson, Rt Hon Nigel


Corrie, John
Lee, John


Crouch, David
Leighton, Ronald


Crowther, J.S.
LeMarchant, Spencer


Cryer, Bob
Lester Jim (Beeston)


Cunningham, G.(IslingtonS)
Luce, Richard


Dalyell, Tam
Lyell, Nicholas


Deakins, Eric
Lyon, Alexander (York)


Dean, Joseph (Leeds West)
McDonald, DrOonagh


Dean, Paul (North Somerset)
Macfarlane, Neil


Dormand, Jack
MacGregor, John


Douglas-Hamilton, LordJ.
McGuire, Michael (Ince)


Dubs, Alfred
McKay, Allen (Penistone)


du Cann, Rt Hon Edward
McNair-Wilson, M. (N'bury)


Dykes, Hugh
McNally, Thomas


Edwards, Rt Hon N. (P'broke)
McWilliam, John


English, Michael
Major, John


Ennals, Rt Hon David
MarshallMichael (Arundel)


Fairgrieve, Russell
Mayhew, Patrick


Finsberg, Geoffrey
Mellor, David


Fookes, Miss Janet
Millan, Rt Hon Bruce


Foot, Rt Hon Michael
Miller,Hal (B'grove)


Forman, Nigel
Miscampbell, Norman


Fox, Marcus
Moate, Roger


Garrett, W. E. (Wall-send)
Monro, Hector


George, Bruce
Moore, John


Goodlad,Alastair
Morgan,Geraint


Gow, Ian
Morris, Rt Hon A. (W'shawe)


Grant, John (IslingtonC)
Morris, Rt Hon C. (O'shaw)


Grimond, RtHon J.
Morris, M. (N'hamptonS)


Grist, Ian
Morrison, HonC. (Devizes)


Gummer,JohnSelwyn
Mudd,David


Hampson, DrKeith
Nelson, Anthony



Oppenheim, RtHon Mrs S.
Smith, RtHon J. (N Lanark)


Orme, RtHon Stanley
Soley, Clive


Osborn, John
Speed, Keith


Page, John (Harrow, West)
Speller,Tony


Page, Rt Hon Sir G. (Crosby)
Spicer, Michael (S Worcs)


Palmer,Arthur
Spriggs,Leslie


Parker,John
Stainton,Keith


Patten,Christopher (Bath)
Stanley,John


Patten, John (Oxford)
Steel, Rt Hon David


Pawsey, James
Stewart, Ian (Hitchin)


Pendry,Tom
StradlingThomas.J.


Powell, Raymond (Ogmore)
Taylor, Teddy (S'endE)


Prescott,John
Tebbit,Norman


Price, Sir David (Eastleigh)
Thorne,Neil (llfordSouth)


Pym, Rt Hon Francis
Tinn, James


Raison,Timothy
Townend,John (Brindlington)


Rathbone,Tim
Varley, Rt Hon Eric G.


Rees, Rt Hon M (Leeds S)
Viggers,Peter


Renton,Tim
Waddington,David


Rhodes James, Robert
Wakeham,John


RhysWilliams,SirBrandon
Waller, Gary


Rifkind,Malcolm
Warren, Kenneth


Roberts, Gwilym (Cannock)
Watkins, David


Roberts, M. (CardiffNW)
Watson,John


Roberts, Wyn (Conway)
Wells,Bowen


Ross, Stephen (Isle of Wight)
Wheeler, John


Rossi, Hugh
Whitlock, William


Sainsbury,HonTimothy
Wiggin,Jerry


St. John-Stevas, Rt Hon N.
Wilkinson,John


Sandelson,Neville
Willey, Rt Hon Frederick


Shaw, Giles (Pudsey)
Wilson, Gordon (DundeeE)


Shaw, Michael (Scarborough)
Young, SirGeorge (Acton)


Shelton,William (Streatham)
Younger, RtHon George


Shersby, Michael



Silverman, Julius
Tellers for the Ayes:


Silvester,Fred
Mr. Donald Thompson and


Sims, Roger
Mr. Tony Newton.


NOES


Alton,David
Powell, RtHon J.E. (S Down)


Baker, Nicholas (N Dorset)
Wells,Bowen


Beaumont-Dark,Anthony



Cockeram,Eric
Tellers for the Noes


Eggar,Tim
Mr. John Bruce-Gardyne and


Molyneaux,James
Mr. Roben Taylor.

Question accordingly agreed to.

Clause ordered to stand part of the Bill.

Clause 5 ordered to stand part of the Bill.

Bill reported, with amendments; as amended, considered.

Motion made, and Question,

That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — House of Commons (Members' Salaries and Pensions)

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I think that it would be for the convenience of the House if the next four motions on Members' salaries and pensions were taken together. Mr. Speaker has selected the amendments to motion No. 3 and motion No. 6 relating to Members' pensionable salary and Members'salaries.

Mr. John Bruce-Gardyne (Knutsford): On a point of order, Mr. Deputy Speaker. The proposition is that we take the four motions together. Will it be possible to divide on the individual motions separately?

Mr. Deputy Speaker: There could be a Division on each of the matters that are being discussed together.

The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): I beg to move,
That, in the opinion of this House, the ordinary salary of every Member in respect of service on and after 13th June 1980 should be regarded for pension purposes as being at the rate of £13,150.
Last July the House accepted the Government's proposal that hon. Members' salaries should be increased by 9·6 per cent. The House will remember that that was less than the increase recommended, by the Review Body on Top Salaries under the chairmanship of Lord Boyle. When it came to the matter of the rate of pay to be used for pension purposes the House amended the Government's motion by voting for the full Boyle rate of £13,750.
The House also voted for the establishment of a link between Members' pay and that of a specific grade in the public service and for the accrual rate for Members' pensions to be increased from one-sixtieth to one-fortieth of final pensionable pay for each year of service.
As my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) said on 7 August, these three amendments raise considerable complexities because of the need to consider the repercussions for other groups in the public service and the implications for public expenditure. Accordingly, the Government prepared a factual paper which discussed the issues. It was circulated to all hon. Members on 23 October. My right hon. Friend told the House that it would have an opportunity to debate and vote on further Government proposals in the light of the paper. That opportunity has now arrived and I shall explain to the House our position on the three issues.
The Government remain strongly of the opinion that Members' pensionable pay should be £13,150—the actual salary rate that will come into payment for Members on 13 June. The House agreed to limit the increase for Members' salaries to 9·6 per cent. I am sure that that is both wise and helpful in present economic circumstances. I believe that today there is a growing sense of realism and restraint in pay claims which is very important. The decision taken by the House has not been without its influence in encouraging such constraint.
The Government are convinced that the same considerations apply to pensionable pay. The Government view is that Members' pensionable pay cannot be treated as if it were a free-standing issue. As the paper made clear, it has implications for the other groups for whom Boyle

made salary recommendations.I know that some hon. Members think that the other groups are irrelevant to the case, but I do not share that view. The review body made recommendations in July on the salaries of the four groups then in its standing remit—chairman and members of the nationalised industry boards, the judiciary, the higher Civil Service and senior officers in the Armed Forces. At about the same time it made recommendations on the pay of Members and Ministers.
The Government considered all the recommendations together. They decided that the salary increases proposed should be reduced in every case in the interests of giving a lead to the rest of the country on pay restraint. As the Prime Minister explained in her statement of 7 July, the Government's approach was to propose a reduction of about one third in the general level of increase proposed by the review body. This reduction applied to all the groups involved and not only to actual salaries but to pensionable pay.
In addition, assistant secretaries and some senior principals in the Civil Service were given pay increases substantially less than was indicated by the evidence collected in the 1980 pay research exercise. They did not receive the higher rate for pension purposes, either. If the House were to say now, in effect, that the pensionable pay of hon. Members must be increased but that the other groups would have to be content with what they got, there would be a sense of grievance and injustice. Such a reaction would, at least, be understandable. I would think it justified.
The Government are convinced that such a decision would be wholly indefencible on the grounds of equity. I must, therefore, make it plain to the House that an inevitable consequence of an increase in the pensionable pay of the Members would be an increase in the pensionable pay of other groups. I do not want any misunderstanding. If there is a vote tonight to increase the pensionable rate of pay for ourselves beyond £13,150 it will be a vote for higher pensionable pay for nationalised industry board members, the judiciary, the higher Civil Service and senior officers of the Armed Forces.
I am one of the first to acknowledge that I might be wrong. However, if hon. Members were to insist on increasing their pensionable pay, which I sincerely hope they will not, many members of the public would feel that we were according to ourselves some degree of special treatment. As a result, they would be likely to feel justified in pressing their own claims that much harder. The House might not feel that that would be a fair reaction but it would be unwise to suggest, let alone to insist, that it would not occur.
The cost of voting for the higher rate of pensionable pay for all the groups would be about £1¼ Vimillion extra in this financial year and the next, and about £⅔ million per annum thereafter. At a time when the battle against inflation requires that everything possible be done to reduce the public sector borrowing requirement that surely is an increase to be avoided. I urge the House, even if against its own wish or inclination, to support the Government motion to make Members' pensionable pay £13,150.
Many hon. Members favour linkage in some form. I hope that the House will feel that my message is more sympathetic towards linkage. The Government remain sceptical about the appropriateness of linking Members' pay to that of any outside group or groups for a variety of


reasons, not least because it would detract from the responsibility of the House to settle Members' pay directly in the light of prevailing circumstances.
The consultation that my right hon. Friend the Member for Chelmsford had with the parliamentary parties indicated that many hon. Members still support linkage. Indeed, there was a majority for it in the House. The idea floated in the Government paper for independent reviews every five years also found favour. These reviews would be coupled with a plan to link the pay of hon. Members with the pay of a selection of comparable occupations in other walks of life in the intervening period.
Therefore, we now propose that a Select Committee should be appointed to look at the question of linkage on the basis of independent reviews being held at the start of each Parliament, coupled with the use of what has been described as a basket method of adjustment during the rest of the lifetime of a Parliament. It was proposed by my predecessor that the review should occur every five years. I think that once in each Parliament is better and fits more naturally into our life style and cycle. We intend that the Select Committee should consider mainly the practicalities of such a system of linkage and how it might work. We would also be interested in its views and comments on the principle involved. I assure the House that in selecting Members for the Committee the Government will not seek to prejudice the outcome of the Committee's deliberations.

Mr. Bruce-Gardyne: Will my right hon. Friend confirm that the independent body that we have had apparently advising us on these matters—namely, the Boyle committee—has more often than not in recent years had its propositions amended, and quite rightly, by the Government of the day before being put before the House?

Mr. Pym: Yes. In common with the recommendations that come before any Government from various bodies, it is up to the Government to make up their own mind. It must be said that the variations that have been proposed for Members' salaries and pensions have not been accorded quite the warmth of welcome by hon. Members that sometimes one would like.

Mr. Nick Budgen: Will my right hon. Friend explain the distinction between the principles of linkage and comparability? In doing that, perhaps he will also explain the Government's position on comparability. I understood that the Pay Research Unit had been abandoned, at any rate for this year. If there is no distinction between comparability and linkage, it seems a little odd that we are to set up a Select Committee when public employees have been told that the principle of comparability is at least in abeyance.

Mr. Pym: One is in danger of attempting to define too accurately the precise meaning of words. It is dificult to envisage the process that we have come to know as comparability. With whom are Members to be compared?

Mr. Budgen: That is another argument.

Mr. Pym: On the other hand, for a number of years hon. Members have thought that linkage to outside groups or one outside group—it used to be one grade in the Civil Service a few years ago but we now have another idea—might make a comparison possible. We are talking about the fine definition of words.

Mr. Charles R. Morris: Does the right hon. Gentleman accept that comparability

establishes a rate of remuneration on the basis of a scientific study of an area of comparison whereas linkage merely selects a grade which has been subject to comparability?

Mr. Pym: At any rate, it seems from my consultations, and especially those of my right hon. Friend the Member for Chelmsford, that the idea of a Select Committee to investigate how the system might work and what might be involved will be acceptable. I think that some comments and views on the principle will be appropriate. There are many hon. Members, although not a majority, who are not in favour of the idea. It seems appropriate for the Select Committee to receive those views, which it can express to the House.
There remains the question of the accrual rate. In July the House expressed the opinion that Members' pensions should be one-fortieth of relevant terminal salary for each year of service rather than one-sixtieth as at present. I can understand the various reasons that led so many hon. Members to vote for that change. As can be seen from the paper that was circulated, we have gone into this complicated subject pretty thoroughly. As a result, the Government have tabled a motion that proposes that the accrual rate should remain unchanged but that the facilities for purchasing added years should be extended and improved. I owe it to the House to explain why we have come to that conclusion.
The first reason is cost. Increasing the accrual rate to one-fortieth would mean that the sums paid into the pension fund annually would have to be increased substantially. If hon. Members' contributions were not increased, the entire cost would have to be met from public funds. We estimate that that would increase the annual Exchequer contribution by about 60 per cent. to 100 per cent. Obviously that is an enormous increase by any standards. On the other hand, if the cost were met by hon. Members, there would, in practical terms, be virtually no change. It is already possible for hon. Members to achieve a position close to one-fortieth accrual by raising their contributions to 15 per cent. under the existing arrangements for purchasing added years. Improving the accrual rate in this way would have the effect of making added years compulsory. I doubt whether that would find unanimous favour. It is possible that it would not even find a majority in favour.
Secondly, the advantages of faster accrual may be more apparent than real, at least for some hon. Members. Many hon. Members enter the House in their thirties and fourties, so they may have 20 or perhaps 30 years before reaching retirement age. However, many will have earned pension rights in their previous employment. There are provisions for transferring these rights into the parliamentary scheme and hence earning extra entitlement. We have already approved proposals for further improving transfer arrangements.
Even if their previous pensions rights are preserved rather than transferred, they still count against the maximum pension allowable to hon. Members. That would be the position if the scheme were changed to one-fortieth accrual. That is a consequence of the Inland Revenue rules that govern occupational pension schemes generally. It would mean that some hon. Members might get no benefit out of an improved accrual rate.
There is a further point. However much some might wish otherwise, we must recognise that our remuneration


is always the subject of outside interest. We are ultimately responsible for a great many pension schemes in the public service. These schemes are a matter of public interest. It is a fact of life that parliamentary pensions are included in that interest. We have recently published the report of the Scott inquiry, which was set up in response to the public's concern about index-linking. Our pensions are index-linked. In my view, it would be wrong to make a rather dramatic improvement in parliamentary pensions—at least for most hon. Members—while the report is still under discussion. I wonder what the reaction of the House would be if, for example, a one-fortieth accrual rate were proposed at this time for the Civl Service.

Mr. A. J. Beith: Why did hon. Members receive on virtually the same day that the motion appeared on the Order Paper a Bill from the House of Lords—the Judicial Pensions Bill[Lords]—which provides precisely for a one-fortieth accrual rate for pensions in that part of the public service?

Mr. Pym: I am not sure whether it is right to compare the pensions of hon. Members with those of judges. The arrangements for the judiciary are exceptional. As the hon. Gentleman knows, the arrival of the Bill from the Lords at such a time was, to say the least, coincidental.
It is for these reasons that the Government believe that the right way forward is to re-examine the present arrangements for purchasing added years. In that way hon. Members will be enabled to decide their pension needs in the light of their individual circumstances and to make their own choices. They will be able to make them within the limits laid down by the Inland Revenue. That seems proper and fair to individual Members.
At present hon. Members may buy added years in two ways. First, they may make what are known as periodical contributions up to the age of 65 years. Secondly, they may make a lump-sum payment within 12 months of entering the House. In general, periodical contributions are a good investment for many Members. However, it has been represented to the Government that they are of more limited help to more senior Members who may not be able to purchase very much more additional service within the Inland Revenue limits.
The Government accept that argument and are therefore proposing a new option to purchase added years by means of a lump sum. A once and for all payment is formidably expensive, so we are proposing a further refinement under which a payment would be made by instalments, with interest, over five years. That will be an attractive proposition to many Members. The burden of payment would be eased and in some circumstances could attract, at least, some tax relief. It will take time to work out all the details but if the House accepts the Government's arguments, we shall arrange for a suitable scheme to be laid as soon as possible. We have worked out an outline of the scheme in the light of what hon. Members said in July and in response to their clear desire to secure better pension arrangements.
I hope that the House will feel that the proposals now before it are a positive and appropriate response to the various opinions and requests made from both sides of the House. Accordingly, I hope that the House will support the motions before it.

Mr. Charles R. Morris: I welcome your suggestion, Mr. Deputy Speaker, to take the motions together. I am conscious that many Members wish to speak and consequently I shall speak to the amendments in my name and that of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) about the notional pensionable rate of £13,750 and substituting fortieths for sixtieths for parliamentary pensions. My speech will be brief to enable other hon. Members to speak.
It is true to say at the outset that there is not one hon. Member who is not conscious of the political secsitivities surrounding Member's pay. However, I would argue that never has the House failed to set an example in pay restraint for the past 16 or more years.
My first point about the £13,750 figure as the notional pensionable rate is to remind the House that that was the figure recommended by the Boyle commission which made a recommendation in response to the Prime Minister who wrote in the following terms:
I would be grateful if you would take this review. It is our intention to accept and implement the recommendation you make.
Could an invitation have been conveyed in more explicit terms? But the Prime Minister who explicitly indicated that she would accept and implement the Boyle recommendation has now changed her mind. I do not argue about that. Prime Ministers are entitled to change their minds. But hon. Members recognise that Prime Ministers are not the final arbiters. The Prime Minister is not the final appeal court about the remuneration of Members of the House. The House is the forum in which to determine the level of Members' pay. No one can argue about the views expressed by the House on 21 July last year. The decision was convincing. It was overwhelming. But, having eaten her words on Members' pay, the Prime Minister is now back inviting the House to eat its words on the subject of the rate of pay for parliamentary notional pension purposes.
Churchill once commented to the effect that there is no better diet than one's own words, but what possible justification is there for the House to reverse the decision it made on 21 July last year? I am conscious of the point that the Leader of the House fairly made when he presented his view of the proposals. He said that the Government believe that it would be virtually impossible to allow the full Boyle commission rate for Members' pensions and not for the other groups, whose salary levels are determined by the Review Body on Top Salaries.
The one point that the right hon. Gentleman did not make was the amount of money involved in terms of £13,750. If that figure is taken as the notional pension figure, it represents £10 a year in terms of pension entitlement. That is the sum total of our arguments about accepting the £13,750 as the notional rate for pension purposes. If we do not support that figure we shall be denying £10 a year to those of our colleagues who retire from the House. That is the argument.
The Leader of the House argued that it would not be right for us to take that figure as the notional rate and to deny it to the other groups within the RBTS remit. What relevance have the other groups to Members' pay? The other groups are senior civil servants, members of


nationalised industry boards and senior officers in the three Services. The pay of those groups bears no relevance to the pay of Members of Parliament.
The pay of senior civil servants is determined, as I said earlier,on the basis of fair comparisons. It is determined on the dictum laid down by the Priestley commission that Civil Service pay should be broadly comparable to that paid by good employers in the private sector. Successive Governments have established a Civil Service pay research unit to investigate scientifically the rate paid by good employers in the private sector. Members of the House do not have their fair rate of pay arrived at scientifically.
The only criterion which determines the rate of pay for Members of Parliament is public and political acceptability. The other groups in the RBTS do not have their rates of pay determined on that basis. Yet the Leader of the House says that if for notional pension rates we take the rate recommended by Boyle and endorsed by the House, in some way we shall be denying other people, whose pay is determined in a completely different way, some of their pension entitlements. I cannot see the validity of that argument.
The Leader of the House stressed that assistant secretaries in the Civil Service receive substantially less than is evidenced in the 1980 pay research exercise and that they would be affected if they were denied that rate for notional pension purposes. As a former Minister in the Civil Service Department, I know that assistant secretaries traditionally receive less than the pay research exercises reveal that they are entitled to. That is because they are in the middle of the heap of Civil Service grades. They are traditionally subject to the pressures of differentials. They always receive substantially less. Therefore, if the point made by the Leader of the House was valid on the basis of the 1980 pay research survey, it was equally valid on the basis of the 1975 pay research survey.
We have a duty to Members who retire. It would be parsimonious and niggardly to deny them £10 a year additional pension on the basis of the arguments of the Leader of the House. His final argument was that if the amendment is passed and all those groups receive the recommended rate:s, and if that rate is accepted as the basis for notional pension purposes, it will increase public expenditure by £1·25 million. He is right, if he includes the whole group. But if the improvement is restricted to Members of Parliament—who are entitled to it—the increase in public expenditure will be of the order of only £60,000 to £80,000. I do not want to give the impression that that is a small sum of money, but it is substantially less than the figure of £1·25 million used by the right hon. Gentleman.
There are alternative sources to public funding from which that £60,000 to £80,000 could be found. If the right hon. Gentleman is prepared to accept my amendment, I hope that he will consider funding it from the Members' parliamentary contributory pensions fund, or from an increase in Members' contributions. Even at this late stage, I hope that he will think again about that matter.
I wish to comment on the proposal to establish a Select Committee to consider increases in Members' remuneration. I accept that that proposal leaves the question of the basic Members' pay rate within the remit of the Boyle commission. The commission will examine the basic Members' rate once during the first Session of each Parliament. The Select Committee will consider adjustments by reference to increases in the remuneration

of what is called a designated group. I assume that by that the Leader of the House means a basket of analogues in outside industry. The Select Committee will then make its recommendation.
I want to ask the Leader of the House a number of questions. What assurances is he prepared to give that such recommendations will not be subject to the same interference as the recommendations of the Boyle commission? On the question of the precise form of pay determination used for parliamentary pay, I am surprised that the method has never been publicly disclosed. I have indicated the basis and principles on which Civil Service pay is determined, but there has never been any identification of the criteria used to determine Members' pay.

Mr. Bruce-Gardyne: Surely there is no mystery about that. However scientific the right hon. Gentleman may imagine the activities of the Pay Research Unit to be, there is nothing scientific about Members' pay. It is determined in one way, and one way only. It is the only way that it can be determined—by vote of the House.

Mr. Morris: I am grateful to the hon. Gentleman for his comments. Members' pay is so politically sensitive that it is not unreasonable to question the criteria on which it is based. I do not know a Member who is not anxious to leam the basis on which Boyle arrives at his recommendations.

Sir Ronald Bell: Is it not true that the question of Members' pay is politically sensitive because we make such a fuss about it? I have listened to the Government's proposals sympathetically. They are a method to make arrangements for the House to have a grand old fuss about the matter every Session.

Mr. Morris: I agree with the hon. and learned Gentleman. I sometimes feel that our debates add to the political sensitivity of the issue and, to some extent, to the public concern that inevitably follows.
The Leader of the House referred to the demand from some hon. Members—I was one—that Members' pay should be linked to the Civil Service grade of assistant secretary. I do not think that that demand ever came from any examination of the responsibilities either of hon. Members or assistant secretaries. Nobody considered the responsibilities of either side. The demand arose from a feeling among parliamentarians that they wanted to take Members' pay out of the political arena.

Mr. Bruce-Gardyne: That cannot be done.

Mr. Morris: I hope that we can do so, and that we are able to resolve some method to determine Members' pay on a fair and equitable basis.
I have previously expressed my appreciation for the service of the Boyle commission, the willingness of its members to undertake the study of Members' pay, and the improvements that have been achieved to date. I hope that the Select Committee, in its endeavours, accept that Members of Parliament are entitled to a fair rate of remuneration which reflects the responsibilities and realities of parliamentary life. I trust that the Select Committee will have the positive support of the Leader of the House.
Our amendment to item No. 6 in relation to Members' pensions seeks to substitute "one-fortieth" for "one-sixtieth" as the accrual rate for parliamentary pensions.


That rate should reflect the political hazards and realities of parliamentary life, in the interests not only of hon. Members but in the interests of their families and dependants.
The current rate of accrual is one-sixtieth. My amendment seeks to make it one-fortieth. The letter of 23 October from the former Chancellor of the Duchy of Lancaster, particularly in paragraph 17 on page 9, invited us to accept that the parliamentary pension scheme, being broadly in line with those of the main public service schemes, influences such schemes, and that any improvement in the accrual rate of Members' pensions would be "repercussive".
That word took me back to the Civil Service Department, because whenever one takes any decision on pensions that word comes into play. Anybody who has served in the Civil Service Department has it pumped into him from the word "go". That is rightly so, because certain pension improvements in particular grades or areas tend to be repercussive.
With regard to the accrual rate, the Government are saying quite simply that, while for pay purposes we cannot be linked to a Civil Service grade, for pension purposes we cannot be unlinked. That is the contradiction in the Government's position, and that is the argument that we have had from the Leader of the House so far. We cannot be linked with the Civil Service for pay purposes, but we must continue to be linked for pension purposes. I give way to my brother.

Mr. Alfred Morris: My right hon. Friend is on a very important point. I sympathise with the Leader of the House. I think that he inherited a rag-bag of a memorandum. The letter of 23 October 1980 stated in paragraph 4:
The Government believe that it would be virtually impossible to allow the full TSRB rate for Members' pensions and not for the other groups.
Page 4 of the letter, say,s:
But there are no outside groups whose work is comparable to that of MPs. The job of a Member of Parliament is unique." In order to underline the point, the former Leader of the House went on to say on page 5 of the letter, in paragraph 9:
There is no outside group whose work is remotely comparable to that of MPs so private sector comparators seem out of the question.
I sympathise with the right hon. Gentleman. If he tries to defend the letter of 23 October, he is trying to defend a ragbag of contradictions.

Mr. Charles R. Morris: I welcome that contribution. It demonstrates that my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) and myself not only believe in brotherhood but actually practise it.

Mr. Frank Hooley: I am sorry to interrupt my right hon. Friend but there is another major discrepancy in that civil servants retire at 60 while we are expected to go on to 65.

Mr. Charles R. Morris: My hon. Friend is absolutely right.
I return to my claim that sixtieths are unrealistic and take no account of the political hazards of parliamentary life. How many Members in the Chamber this evening can

look forward to 60, 40, 30 or even 20 years as parliamentarians? Most of us are lucky if we can look more than five years ahead.

Mr. John Parker: The average length of service in the House is 16 years. That is the figure to bear in mind.

Mr. Morris: I am grateful to my hon. Friend the father of the House. To think in terms of fortieths and sixtieths may be quite right in the context of the career of a civil servant, because that is a normal occupational career, But parliamentarians do not live that kind of occupational life.

Mr. R. A. McCrindle: I understand the points that the right hon. Gentleman is trying to make, but is he not overlooking the fact that Members coming to the House in the 1970s and 1980s who can expect, with luck, to serve for a maximum of perhaps 25 years, may bring with them already earned pensions from an occupational scheme, built up before we came to the House? That means that taking the sixtieths of the parliamentary scheme together with the entitlement that we have when we arrive in the House, some of us on leaving at retirement age might be at least as well off as on the one-fortieth basis that the right hon. Gentleman suggests.

Mr. Morris: I am grateful to the hon. Gentleman for the point that he makes, but I must take up some of the words that he used. He said that some of us would be lucky to spend 25 years as parliamentarians. Most of us would be extremely lucky. He then talked about the contributions that he was able to transfer into the parliamentary scheme. He was even luckier in that regard. I could indicate a host of Opposition Members from the mining industry, as well as small business men on the Conservative side, who have never made any provision for pension entitlement and are not so lucky as he. While I accept that the hon. Gentleman made a perfectly fair point, we are entitled to take a slightly broader perspective of the arguments about transferability.

Mr. Roger Moate: Before the right hon. Gentleman waxes too enthusiastic about fortieths, will he tell the House how he expects those fortieths to be funded? Does he expect them to be funded by individual Members or by the taxpayer?

Mr. Morris: I shall come to that point before finishing. The House may be relieved to hear that I intend to sit down very soon. I thought that the hon. Member for Berwick-upon-Tweed (Mr. Beith) was absolutely right and justified in referring to the rather odd coincidence that on the very day that we are being denied the improvements that I want to see in the parliamentary scheme the Judicial Pensions Bill[Lords] has been published.
I quote briefly from clause 2(2) of that Bill:
The annual rate of the pension payable under this section to a person retiring from any office after 15 or more years relevant service shall be one half of his last annual salary.
That is half pay after 15 years. Yet the same Government are adopting this rather unhelpful attitude in insisting that parliamentarians should be linked to civil servants for pension purposes.
The Leader of the House referred to the Civil Service pension scheme. He might have referred to other pension schemes in the public sector. While the Civil Service scheme is based upon sixtieths—it is actually eightieths, with a lump sum which makes it equivalent to


sixtieths—other pension schemes in the public sector are surprisingly generous, considering the objections that we hear to fortieths for parliamentarians.

Mr. Michael English: I presume that my right hon. Friend also remembers that there are 7 million people in those schemes. We are constantly told that there are only about 700,000 people in the Civil Service.

Mr. Morris: My hon. Friend is absolutely right.
I was about to refer to the Inland Revenue memorandum No. 12 provisions. Those provisions mean that retired employees can receive two-thirds of their retiring pay for as little as 10 years' service. It may be thought that I am talking about the top hat schemes in the private sector, about pension enhancement schemes that are restricted to a very select area.
Let me indicate the areas in the public sector where Inland Revenue memorandum No. 12 provisions obtain at present. They obtain within the British Steel Corporation, the National Coal Board, the British Gas Council, the Civil Aviation Authority—

Mr. Hooley: The National Health Service.

Mr. Morris: They exist with Cable and Wireless. When the Leader of the House said that we must continue to be linked with the Civil Service pension scheme he was being slightly disingenuous. He ought to have indicated the generosity of the pension schemes which exist in the public sector. They are enjoyed by members of nationalised industry boards and they are also enjoyed over a wide area of the private sector.
Only the other day, I was looking at an extract from a survey carried out by the National Association of Pension Funds in 1979 which inquired into occupational pension schemes. From that report, one concludes that IRM No. 12 schemes now cover 48 per cent. of companies and institutions in the private sector. That is the extent of the IRM No. 12 schemes which have an accrual rate of 10 years. Yet here we are arguing about fortieths as opposed to sixtieths for parliamentarians. It makes one wonder why the Government and the Leader of the House are so insistent about opposing the reasonable amendment that I have tabled.
There is an even more fascinating situation with regard to the Ministry of Defence and serving senior officers of the three Services. There is a rule in the Services that a senior officer will not be promoted within two years of retirement. But on inquiring of the Department there had been any exceptions to that rule I was informed that in the recent past there have been 20 exceptions. I am not the type of person who would impute any ulterior motive to that situation. However, it is a fact of life that if one is promoted within 18 months of one's retirement as a serving officer, in the process one enhances one's pension entitlement. That is taking place in the Services.
Compared with other Parliaments, we are at the bottom of the heap in terms of pension provision. I was impressed with the thoughtfulness of my hon. Friend the Member for Ince (Mr. McGuire) in providing me with details of the contributory pension scheme from Members of the Dublin Parliament. As I have suggested, we are at the bottom of the heap. We are certainly not quite as generously provided for as Members of the Dublin Parliament. Their pension entitlement is on the basis of fortieths.
My right hon. Friend the Member for Wythenshawe instanced the situation in relation to a Member of the European Parliament. I am conscious that he was quoting from an article in The Times of 8 December last year. The distinguished political editor of The Times commented on the situation which he had identified with regard to the pension provisions in the European Parliament. He quoted one Herr Albert Piirsten, a West German Member of the European Parliament in the Christian Democrat group, who died and left a wiow and a son young enough to be dependent on him. Mr. Wood reports:
Widow and son qualified for pensions under a generalised position taken by the Parliament managerial bureau in April. The particular details of the pensions have now been settled. Widow and son will receive a joint pension of about £1,000 a month.
That should be compared with the situation relating to two former Cabinet Ministers in this Parliament. One had served 28 years and the other 22 years. The widow of one is receiving a pension of £3,000 a year, and the widow of the other something less than £3,000 a year. Their position should be compared with the widow of Herr Piirsten, who served as a Member of the European Parliament for one year. It is not on to continue arguing about sixtieths as opposed to fortieths.
I was impressed when in December last year I read an article by a distinguished journalist, Roger Carroll who is money editor of The Sun. He served in the Parliamentary Press Gallery. Under the heading:
We must get out of this awful pensions mess"—
the article itself deals with the problem of indexing of civil service pensions—he lists those who get what in terms of pensions. It is illuminating to discover where he places Members of Parliament in his list. We finish between a Civil Service principal with 40 years' service and a sergeant in the Army with 37 years' service.
That just about sums up the argument for fortieths. Conservative Members will ask how we can fund this improvement. What about restrospection? That is an important question. Rarely has any improved pension provision been introduced in this House which dealt with the subject retrospectively. The question of restrospection is to some extent a false lead. However, there is a major question of funding.
I remind the Leader of the House and the House itself that I am not seeking to improve pensions merely for Members of Parliament. I am more concerned with their families and dependants—those in our occupational life whom we invariably tend to put last.

Mr. Edward du Cann: If I may be permitted a personal observation, the feature of the speech of the right hon. Member for Manchester, Openshaw (Mr. Morris) that pleased the House most was the practical indication, in his response to an intervention, that the spirit of brotherly comradeship still lives in the Labour Party. Long may it do so. It was genuine and pleasing, and I hope that it is an example that will spread.
At different times both the right hon. Gentleman and my right hon. Friend laid stress on the fact that undoubtedly the decisions that we make for ourselves are carefully monitored by the public. There is no reason for regret in that. It is perfectly true that whatever we decide for ourselves, be it about remuneration or pensions, it is certain that it will be misrepresented and gossiped about, and that we shall be teased about whatever we do.
That, however, is no reason now, or at any other time, or in any other circumstances, to be afraid of doing what we know to be right. It is plain that consistently, over many years, the House and successive Administrations have shirked doing what is right. My right hon. Friend was correct when he said that this was not a convenient moment to be doing certain things. It never is. In any case, the middle of a parliamentary Session is not the most convenient time to legislate. That brings me to the point upon which I want to lay most emphasis.
It is sad that when advice has been given by Government or Opposition Back Benchers to their leaders it has been so consistently ignored in the past. That is the reason why we have had difficulty and embarrassment. We have nobody but ourselves to blame for that. I hope with all my heart that my right hon. Friend is as wise as he is sensitive on these matters. I hope that he will do his utmost to ensure that while he holds the fine position of the leadership of the House we shall not be so embarrassed again. There is no need for it.
We are dealing with two specific matters in this little group of motions. The first two relate to the proposal that the pension should be linked to the salary of £ 13,150 rather than £13,750. I regret very much that the Government are apparently unwilling to accept the larger figure. It has been said already that we are in a unique profession. The Liberal Whip quoted the example of the judges. The right hon. Member for Openshaw said that the repercussions arising from choosing the higher figure have been exaggerated. In addition to these points, it seems appropriate to emphasise that there is a good precedent for this. If it was right to attach the pension to a higher figure—the figure recommended by Boyle—in an earlier circumstance, there can be no argument against doing it now.
The motion on Members' pensions refers to the accrual rate. I am sorry that the Government are not willing to agree to fortieths. The House has voted for that. If the House passes a motion it should be accepted by the Government with a good grace. One of the reasons for the trouble, difficulty and embarrassment that we always have is that successive Governments agonise over these matters. They pore over them and judge them, and then reintroduce them in an amended form. Why are Governments never willing to accept what the House, in its collective wisdom, decides to do?
My right hon. Friend cogently advanced the arguments why he thought that the suggestion of fortieths was wrong. He suggested an alternative. The House should be grateful to him for that alternative, because it will undoubtedly bring substantial benefits to those who want to avail themselves of it. I still think, however, that it would have been right to accept what the House judged to be correct.
My hon. Friend the Member for Croydon, North-West (Mr. Taylor) talked about index-linking, which is so much a part of these matters. I so often agree with him and I respect his integrity of judgment and his practical experience. However, I venture to disagree with some of his remarks. I believe that the advice that I attempted to give to the House about the need to encourage transferability in pensions in general, and particularly in the private sector, is correct. I would not withdraw a word of that. It is right that the House should do all that it can to encourage transferability—movement between jobs, and so on. We ought to have done that years ago.
I hope that the Committee that is sitting at the moment will produce recommendations that will enable the House to make progress. It is reasonable that a man should be able to transfer his pension rights into the House's scheme, if he comes into the House. There can be no argument about that. I guess that my hon. Friend believes that, by and large, there are too many people in the public service in index-linked schemes, including Members of Parliament. That is probably too big a financial burden for the country to bear now. I totally agree with that.
I strongly repudiate the arguments of the Scott committee. My right hon. Friend said that he hoped that we would have an opportunity to debate them before long. However, that is not an argument for suggesting that in general it is wrong to encourage the transferability of pensions. It is right that the House should give an example. I am glad that we have passed this provision by such a substantial majority.
Secondly, I turn to salaries.

Mr. Bruce-Gardyne: I was also involved in the motion to which my right hon. Friend referred. I suggest to him that the point at issue was not the transferability of pensions, about which I follow his point, but the provision that we are being invited to approve tonight, whereby we could move our pension entitlement from the private sector, un-indexed, to our indexed pension arrangements. I suggest that that is related to our considerations on the Scott report.

Mr. du Cann: There is merit in what my hon. Friend says. 1 agree with that. However, I think that the two matters are separate. New entrants to the House who have given up careers outside ought to be entitled, if they wish, to move their pensions to the House of Commons scheme. No one can deny the good sense and justice of that. If, after that, my hon. Friend wants to say that Members of Parliament should not have an index-linked scheme, that is a separate matter. I do not say that I disagree with him. I would not disagree if he said that the very long list of professions and occupations, additional to the 700,000 people in the Civil Service to which the hon. Member for Nottingham, West (Mr. English) referred, who are on index-linked pensions, are too numerous for the general body of taxpayers to bear. We shall debate that on another occasion. However, there is no reason why we should not allow transferability for new entrants to the House into the current scheme. Let us amend it later, if that is proper.

Mr. Hooley: The hon. Member for Knutsford (Mr. Bruce-Gardyne) is wrong. It depends on the calculation of the transfer. If the calculation of the transfer allows for indexation, it is fair. That point was made by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham).

Mr. du Cann: Once we start examining individual cases we shall be here for a long time. As a rule, it is better to stick to principles.
I now turn to the question of salaries. I do not wish to talk about the quantum of salaries; I wish to comment on the point raised in the motion. I support the idea of the Select Committee. What my right hon. Friend said about considering these matters in each Parliament rather than in a fixed number of years was wise, as are so many of his utterances.
If the House decides to establish the Select Committee its report will be merely a general guide on comparability;


it will not be mandatory. However, I see no harm in endeavouring to establish a yardstick by which we might judge our own circumstances—a tool, so to speak, to help us in the work. I cannot think why that should be objected to in general. There is not a close analogy, if there is any analogy at all, with Clegg. I repeat that what we are suggesting is not mandatory.
The right hon. Member for Openshaw rightly made the point that the circumstances of Members of this Parliament do not always compare with those of Members of other Parliaments. We cannot compare Parliaments exactly. However, I should like quickly to draw two matters to the attention of the House. First, a little while ago The House Magazine listed the circumstances of Members of Parliaments in a number of countries. The House will be familiar with the position in the United States, for example, so I shall not quote it. I merely say that looking at Europe I find that we are substantially underpaid in comparison with Belgium, the Federal Republic of Germany, and France, and we are paid less than Italy, Luxembourg and the Netherlands. I could go on.
Someone has to say, and say clearly—perhaps it is easier for me to say it, because I am able to earn a living outside the House and do not depend upon a parliamentary salary; I have no axe to grind—that it is essential to see that Members of Parliament generally have the right pay and conditions to do their job. It is a great honour to be a Member of the House. To be in this place is one of the sweetest and happiest things in the world. However, there is no reason why the public should expect those who accept responsibility, take seniority and carry some burden—not always too effectively—to penalise their families or themselves if they choose a career in the public service. All right—we choose to do so, but democracy imposes responsibilities not only upon those who are its most obvious handmaidens in Parliament but upon the general body of the electorate to provide the democratic apparatus with the style and the scope to enable it to carry out its normal responsibilities. We fail the idea of democracy if we have poorly paid parliamentarians. I am in no doubt about that.
Secondly, if the House would be good enough at some time to refresh its memory by looking at an answer given in the House on 7 August 1980 it would find that the remuneration that Members of Parliament have received over the past 16 or so years was very much greater, proportionately, than the remuneration that we receive now. Conditions here have improved greatly in recent years, largely because of the pressure of Back Benchers in the Chamber and of the two main parliamentary parties. That is good and appropriate. However, in real terms of money earned we are still earning less than we did some years ago.
That fact lends added point to the intervention of my hon. Friend the Member for Buckingham (Mr. Benyon). He pointed out that we must create a situation in which at the beginning of every Parliament we get the matter right for the remainder of the Parliament. That is enormously important, and I make no apology for reiterating the point to the Leader of the House with as much emphasis as I can command.

Mr. Frank Hooley: I wish to concentrate on the motions numbered 5 and 6. First, I make a general observation that arises from the

intervention of my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris). The document circulated last October from the then Chancellor of the Duchy of Lancaster's office was appallingly dishonest. Every time that it was convenient to the argument a comparison was made with civil servants or with other bodies. However, when it was not convenient, it was said that Members of Parliament were not comparable with outside groups. Paragraph 9 states:
There is no outside group whose work is remotely comparable to that of MPs so private sector comparators seem out of the question.
I find such dishonesty distasteful.
The work and career of a Member of Parliament is peculiar and must be examined on that basis. We cannot claim to go beyond the rules laid down by the Inland Revenue with regard to pensions and ask for grandiose scales of remuneration, such as those in Europe, which are disgraceful. However, when considering pension and remuneration arrangements, we must accept that the job of being a Member of Parliament is peculiar in career structure and the nature of the work.
I do not believe that the Select Committee is a bad idea, although the independent review body could have done the job equally well had it been so instructed. Had the House given Lord Boyle and his colleagues instructions to sort out the linkage principle, they would have been capable of doing so. The advantage would have been that the recommendation would have come to the House from an independent body rather than from a group of our own colleagues. Nevertheless, the Select Committee could produce useful recommendations.
It is odd that the Select Committee's terms of reference are so narrowly drawn. Why is only one form of linkage spelt out in the motion—the designated group of outside occupations or the basket? One can think of many possible linkages—to the salaries of High Court judges, the Chief Commissioner of Police or consultant surgeons in the National Health Service. More importantly, the linkage could be with an independent index.
Again, several kinds of index could be devised. One could have some kind of index related to the RPI or to average industrial earnings. A number of indices could be taken and then multiplied or divided by a certain factor to produce whatever linkage the House thought appropriate. Why has the Leader of the House ruled out from the terms of reference of the Select Committee these other types of linkage that the Select Committee could properly explore? The motion includes the words
by reference to increases in the remuneration of a designated group of outside occupations".
That is one possibility. I do not see why the Select Committee should be precluded, from the word go, from looking at other possibilities that may turn out not to be practical or useful but should, nevertheless, be explored. The Select Committee could come back to the House to report that some proposals were possible and others were not. I cannot see why the terms of reference are so narrowly drawn. It might have been useful to charge the Select Committee with the task of examining the complicated issue of pensions, although that may put too heavy a load on its deliberations.
I believe that the Leader of the House referred to the composition of the Select Committee in his opening speech. I do not recall his exact words. I wish, however, to make three points. First, it should include hon.


Members who were elected for the first time in 1979—our newest colleagues. I am sure that they would have a useful contribution to make. Secondly, it should include one or possibly two hon. Members who, at some occasion in their parliamentary career, have lost their seats. This creates personal, financial and other problems. It might be useful if the direct experience of such hon. Members were reflected in the Committee. Thirdly, it should include one or two hon. Members who have young, dependent families. They could bring into the deliberations some subjective considerations that might not occur to other hon. Members who like myself, are grandfathers.
I hope that the Leader of the House, in making up this Committee, will pay careful attention to its composition, and to the range of experience, age, and so on. I hope that we shall not get only high-powered Privy Councillors and long-serving hon. Members, although I am not saying that they should be ruled out.
I wish to discuss the motion numbered 6 on pensions and the amendment that I, together with my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris), propose. The amendment reiterates the position already taken by the House. As the right hon. Member for Taunton (Mr. du Cann) pointed out, the amendment, in a sense, is a misnomer. The Leader of the House's resolution is, in effect, an amendment. The right hon. Gentleman seeks to change or amend a decision taken formally by the House in recent times—about six months ago, I think. It is, therefore, in a sense, an anomaly to call the amendment an amendment. It is the Leader of the House who is trying to change things.
In support of this proposition, I wish to refer briefly to my own circumstances as a Member of the House, not because I regard them as representing a hard case or as being specially unlucky. On the contrary, I believe that, in many respects, I have been very lucky. I think, however, that my circumstances highlight the peculiar difficulties of calculating and working out a sensible pension arrangement for a Member of Parliament. I quote my circumstances because I do not know the personal circumstances of other hon. Members. They highlight points that need to be highlighted.
I entered the House at the age of 42, which is starting a career at rather a late stage. The Leader of the House mentioned that many hon. Members come into the House in their thirties or forties. I suspect that those in their forties are more characteristic than those on their thirties. I discovered immediately that my university pension arrangements—I was a university administrator before coming here—were not transferable. I received certain advice about continuing to pay the premium. In my financial circumstances, that was totally impractical. Consequently, there was no transfer at all in my case at that time in 1966.
Given the biblical survival rate of three score years and ten, I suppose that, on entering the House I might have looked, to 28 years' parliamentary service, with a bit of luck. However, the political climate changed in 1970 and I was out. The first tranche of my reckonable service was four and a quarter years. Then came 1974. The political climate changed a little again. What also changed, so far as I was concerned, was the highly capricious and arbitrary action of the boundary commission, which provided me with a somewhat better bet in terms of constituency

chances. I came back in 1974. I have been here since then. In 1974 there was an important difference, because I found that as I had been in local Government service between 1970 and 1974 I could convert that superannuation arrangement into reckonable service for my parliamentary salary. As a result, I was somewhat better off than I was when I first became a Member of Parliament.
The capricious and arbitrary actions of the boundary commission will probably terminate my parliamentary career in 1983. On any ordinary calculation, and allowing for political trends, I shall be out on my ear in 1983 at the age of 60. I think that I shall have done 17 years' pensionable service. However, as I shall be only 601 shall not be able to get a pension. I cannot draw any parliamentary pension until I am 65. Therefore, my career is not remotely comparable with that of any civil servant. The vast majority of those civil servants who do a reasonable day's work can expect to have 30 or 40 years' reckonable service towards their pensions. In the document to which I have referred the average reckonable service for a Member of Parliament is 17 to 20 years. In my case, the lower figure will probably apply. I am not complaining. I chose to leave a perfectly safe job and to take up this career. I was extremely lucky to be able to do so.
The hazards of politics and of boundaries, and so on, are beyond my control. I have no control over the boundary commission, but it can put me and other hon. Members out of a job at any stage in life. It can totally disrupt any calculation of our pension requirements. The one-fortieth idea is intended as a remedy to some of the problems that arise from such situations. It may not be the best remedy. However, six months ago the House decided that it was, and the Leader of the House—for reasons that are not very convincing—is now trying to reverse that decision.
As the right hon. Member for Taunton pointed out, the problem is mainly one of transferability. We must take a harder look at this problem. Probably one-half or one-third of hon. Members come to the House with pension rights accrued from elsewhere. Provided that they can maintain or transfer them, one-sixtieth or one-fortieth might be enough. However, as I found to my cost in 1966, not all arrangements are transferable. In addition, many hon. Members—indeed, more are likely to come from the Opposition Benches than from the Conservative Benches—come from occupations that do not offer pension schemes. Alternatively, they may have very tiny accruable pension rights. Under the one-sixtieth arrangements they find themselves in difficulty.
We are discussing an expression of opinion and, not a provision that requires the Queen's recommendation. I suggest that the opinion that the House expressed last year was right. The attempt to amend it is not sound. I hope that hon. Members will confirm the standing opinion of the House. If the provision is accepted in principle, some group—either within the House or outside—will have to sit down and work out how we can find a sensible and fair pension arrangement. The arrangement should not be extravagant or grossly out of line with the arrangements that are made for our fellow citizens. However, it should take account of the unique and peculiar nature of a political career in the House.

Mr. Paul Dean: I rise to oppose the amendment moved by the right hon. Member for Manchester, Openshaw (Mr. Morris).I agree with some of the arguments that he advanced, but this is the worst possible time for us, as serving Members of the House, to contemplate at public expense the improvement of our pension rights. It is the worst possible time, because in a Bill coming before the House next week we shall be asking national insurance pensioners to make sacrifices in the present economic circumstances.

Mr. D. N. Campbell-Savours: Mr. D. N. Campbell-Savours (Workington) rose—

Mr Dean: I shall not give way. We have heard about the controversy which surrounds index-linkng, and we must remember that our pension scheme is index-linked. Over and above the national insurance pension, which is price-protected, we have three nations. First, there is the public service pensioner, who is absolutely guaranteed index-linking, with no ceiling or limit of any kind. Secondly, there are those in occupational pensions who may have some increase, usually on an ad hoc basis, but rarely enough to meet the full increase in prices. Thirdly, there are those who have no occupational pension scheme at all, or the self-employed, all of whom are on their own.
I hope that as a result of our discussions about index linking it will be possible to deal with some of the criticisms by having a ceiling or a cut-off point for the increases in public service pensions. I hope that compromise will be possible while maintaining the principles and the obligations which the State undertook in earlier years towards public service pensioners. But while the controversy continues, it would be an extremely bad moment for us to vote ourselves, at public expense, further improvements in our pension rights.
The third reason why it is the wrong moment relates to the question of pay. Many people in the private sector are accepting modest increases in pay, and in some cases no increases at all, in order to preserve their jobs. In many cases that has an implication for their pensions. Equally, sacrifices are being asked for in the public sector. Here, too, there is an implication for pensions. So whether one talks of national insurance pensioners, public service pensioners and index linking or the present pay position, it seems to me wholly wrong to pick this moment to make improvements in our pension arrangements.

Sir Ronald Bell: I intervene only to say that I think that we should pick this moment. We have passed motions of this kind over and over again, and this moment is merely the moment when the Government are trying to reverse something that we did long ago.

Mr. Dean: I understand what my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) is saying. We have been here before, as he says. He and I have taken part in many debates in this connection. None the less, there are strong arguments against the amendments in the present conditions.
Against that background, I have a few brief comments to make on the motions before us, first on those in relation to pensionable salaries. It is a bad practice to have pension rights based on notional pay rather than actual pay. I welcome the fact that we are now getting away from that practice, having had our pension rates based on notional

pay for some time. It is surely correct—and here I agree with my hon. Friend the Member for Taunton (Mr. du Cann)—to get the pay right first. The pension will follow from that. But to have an artificial device is surely inappropriate for us, and setting a bad example to others. For that reason, I shall support my right hon. Friend the Leader of the House if there are votes on the motions in relation to pensionable salaries.
The same general arguments that I advanced at the beginning of my speech apply to the motion in relation to Members' pensions. But I have a good deal of sympathy with the point that was made by my right hon. Friend the Member for Taunton, when he reminded us of the expression of view that was given in the House, and also with the right hon. Member for Manchester, Openshaw (Mr. Morris), who elaborated his reasons for preferring one-fortieth.
Pension schemes should try, as far as possible, to gear themselves to the likely length of service of those concerned. There are many examples. The judges scheme has been mentioned. There are examples in the private sector where it is possible, within the Inland Revenue rules, for pension schemes to mature over a comparatively short period in order to meet the circumstances of individuals or small groups of people. Considering sixtieths in that regard and comparing that basis with the average length of service of 20 years, there are strong arguments for improving on the present basis of sixtieths.
The argument has been advanced from several parts of the House that not everybody who comes into the House comes in with pension rights which can be transferred into the parliamentary scheme. The hon. Member for Sheffield, Heeley (Mr. Hooley) mentioned his own case, and one can think of other examples. There is the example of the self-employed, who have been working outside and ploughing their resources back into their businesses. They simply have not had the resources in many cases to start building up pension rights, therefore there is nothing that they can transfer into the pension scheme.
There are also the Members who are older than some of their colleagues when they come into the House. The development of pension schemes is a comparatively modern phenomenon. There are many older colleagues in this House who probably spent half their working lives without any opportunity to build up pensions rights. There are, therefore, many individual cases in which one can argue strongly that fortieths would be more appropriate than sixtieths.
But I come back to my original question. Is it right at the present moment that it should be done at the taxpayers' expense. It seems to me that the answer to that question should be "No". That is why I welcome the compromise that my right hon. Friend the Leader of the House is proposing in the motion relating to Members' pensions, under which it will be possible for additional reckonable service to be built up by lump sum or by fixed instalments payable as a deduction from salary. That will be at the Member's own expense, so that at any rate for the time being it is a reasonable compromise, and I hope that the House will be able to accept it.
The motion in relation to Members' salaries raises different issues and I have rather mixed feelings on it. I very much welcome the idea of having a look at our pay—and, indeed, at our pensions—at the early stages in each Parliament. That is a desirable development. I am not clear what a Select Committee can do which a revised


Boyle could not do equally well or better. There is something to be said on occasions for the devil that one knows. I am inclined to think in this case that although Boyle has often been disregarded in this House nonetheless it is a system with which we are fairly familiar.
The main reason why I have mixed feelings about Motion No. 5 is the reference to increases in the remuneration of a designated group of outside occupations. What group? How does one define the group? One of the reasons why pay research is in abeyance is that a large number of people, particularly technical people in the Civil Service, expressed a good deal of dissatisfaction about the way it was working in practice. I would be very reluctant to see all the disadvantages and all the arguments that have gathered round pay research in recent years being translated to the pay of Members of the House. There are other arguments too which I will not elaborate because they are familiar to the House.
I dispute the suggestion of the right hon. Member for Openshaw that by this device we should take our pay out of politics. It is probably more likely that we should bring our pay into politics in a most undesirable way. For example, if a comparison is made with some grade in the Civil Service and if the Government of the day happened to be having an argument with the Civil Service as to its level of pay, would there not be a risk that we would be dragged into that political argument? We should be in deep political water as a result. I fear that this is the risk we would run were we to go for some form of comparability.
I shall certainly support my right hon. Friend on the motions with regard to pensions, but I have very grave doubts about motions on Members' salaries with regard to the proposal for a Select Committee.

Mr. John Parker: I should like to speak partly as Father of the House and partly as chairman of the Pensions Trust of the House. It is 46 years since I came to the House and for none of that period have Members of Parliament been well paid. I started in 1935 with a salary of £400. In 1937 it went up to £600, thanks very largely to the action taken by Mr. Attlee, who was then the Leader of the Opposition, in collecting a number of budgets of Members and presenting a very good case to Mr. Baldwin, the then Prime Minister, as a result of which Mr. Baldwin agreed to provide £600 a year and to provide a salary as well for the Leader of the Opposition. Right the way through salaries have remained low.
I should like to make the point that the length of service of Members always remained low, too. Before the war the average length of service of a Member was 15 years. Today it is 16 years. I do not think that it is likely to grow. As a number of Members have already said, it is a hazardous occupation. I have been fortunate—I will not say more than that—in my career in the House, although the first time I stood for Parliament I was defeated by a majority of 20,000.
I stress that it is a hazardous occupation. It cannot compare with the Civil Service, with judges, or with any other occupation. As other Members have pointed out, it is a unique job in itself and it should be remunerated and rewarded as a special job and an important job in the community.
As chairman of the Pensions Trust, I see no reason why increased pensions should be a charge on public funds. There are large sums of money in the pensions fund—£20 million at least—and I am certain that, apart from the fund being able to make a contribution towards increased pensions, Members would be prepared themselves to make an extra contribution. The Pensions Committee could be asked to make recommendations on the amount of money available from the fund and what it is thought that Members might be prepared to pay in extra contributions.
I quite agree with those who have said that the present is not the right time, given the economic climate, to ask for an extra charge on public funds if this can be done without a charge on public funds or with only a small charge on public funds.
In saying that the Pensions Trust should be asked to consider what Members might be prepared to contribute I am speaking for myself. The trust has not considered detailed proposals to put to the Government, but it has considered the whole question of pensions, what size they should be and what can be done about them. The trust has made no recommendations on this point, although it made recommendations which the Leader of the House adopted in the earlier Bill.
The Pensions Trust is a reputable body, whose members have a great deal of experience. Regular expert advice is given to it from outside as to investments. I ask the Government to take seriously the suggestion that the pension scheme might be funded partly by contributions from the pensions fund and partly by extra contributions from Members.

Sir Brandon Rhys Williams: I am glad of the opportunity to contribute to the debate on the motion relating to Members' salaries, which raises the question of indexation, and on the motion relating to Members' pensions, which deals with the rate of build-up of entitlement.
Although in these debates we are dealing only with the conditions of Members of the House of Commons, we are touching on issues of wide public interest. What we decide is appropriate for ourselves the general public may well conclude is appropriate for them as well.
On the subject of the motion relating to Members' salaries we are in danger of falling into extremely sloppy thinking on both sides of the House about the concept of indexation. The proposals that we have already dealt with this evening for indexation of pensions of those who have left the service of the House seem to be somewhat out of accord with what is proposed by the Government in the motion. The cost of living is the index which is applied for people who have finished their service, but what seems to be suggested for those who are still at work, but who might be entitled to uprating from time to time, is that the reference point should be a designated group of outside occupations. The fact that this anomaly appears in the recommendations that the Government are making in the course of a single evening shows that we need to give much more thought to the question of indexation.
I entirely share the misgivings of hon. Members who do not like indexation to the cost of living index. There are many reasons for that. The cost of living index is an extremely blunt and inaccurate instrument. It is difficult to say, for instance, that the cost of living of a single person will vary in the same way as will the cost of living


of a family with three or four children. Pensioners have different needs from people at the start of a career. It is difficult to say with certainty that in calculating the cost of living index we are doing justice to all concerned.
My particular reason for rejecting the cost of living index as the basis of indexation for pensions is that it hitches us to a balloon which is out of the control of the Government and the taxpayer. The cost of living index might rise considerably as a result of a further increase in the world price of oil or sugar or some other household necessity. It is not fair to designate particular minority groups which are to be totally protected from changes against which the rest of the population cannot protect themselves. If we are to look for an index we should look for one that really relates to the progress of the entire economy and the population as a whole.
It is important to consider the purpose of indexation. Some of my hon. Friends are disposed to attack it altogether; but it is not right to abandon indexation if that has the effect of exposing certain minority groups to a reduction in their standards of living through decisions by the majority about the way in which our currency is allowed to depreciate. The object of indexation is to protect minority groups which might be left behind in the general inflation of the currency.
It is shocking and repugnant that we should even contemplate exposing pensioners to a decline in their standards of living which is not suffered by the rest of the population because they are able to defend themselves by claiming higher wages or by some other means. When people are at the end of their careers they are still entitled to be treated as members of our society. It is a sign of our deterioration as a society and the decline in our moral commitment to minority groups if we contemplate exposing them to a fall in their standard of living because of the way in which we happen to run our economy, our tax system or our wage negotiations.
A society which is not prepared to look after its widows, children or pensioners is reverting to cannibalism. We must resist the temptation to think that it is good for the taxpayer to place a ceiling on our commitment to our pensioners. Our pensioners have brought us to where we are. We must take them with us wherever we go. If our economy is going downhill it is fair that pensioners should also accept a reduction in their standards. However, if the economy as a whole is booming the pensioners should share in that prosperity. We must take them with us in our ups and downs. That is why I do not like the adoption of the cost of living index.
The Scott report is an admirable document. It grasps a number of nettles which have to be grasped. I hope that we shall be able to examine the whole basis of indexation, public sector pensions, uprating of social security benefit, and so on in our consideration of the report.
I accept the idea of a Select Committee and I think it would be right to have reviews by an independent body once during the first Session of each Parliament. However, I do not like the idea of looking for a designated group of outside occupations. I share the view of hon. Members that the work of a Member of Parliament is not like anything else. I suggest that we should relate the uprating of Members' salaries to the progress of the earned income of the whole population, bearing in mind that hon. Members are drawn from all strata in society. They are not drawn only from the professional classes or the working classes.

The earned income of the total population is the appropriate index to use while hon. Members are at work and when they are in retirement.
I turn to the question of the value of an indexed pension. It should cost much more. The private sector schemes are not able to offer indexation for various reasons. That does not mean that an indexed pension is a priceless asset. However, it is of considerable value. People who already have the good fortune to be disignated in the class of service which ranks for an indexed pension should be making much larger contributions while they are at work.
I do not know whether it is possible to find an exact figure for the extra contributions that they should be making. However, I believe that it would be proper for the Government to apply across the entire public service a surcharge of 10 per cent, on earned income for those who qualify for an indexed pension. That 10 per cent, would still represent good value.
The reason for the bitterness that has grown up between those who are in private sector schemes and those who benefit from public service schemes is that the standard of living in retirement of those who are able to depend on indexation is streaking ahead of those who depend on private sector schemes. Those who are in public service schemes appear not to have paid during their working lives for the benefit that they subsequently derive in retirement.

Mr. George Cunningham: Surely the hon. Gentleman will accept that the recent report provided no foundation for the view that those who benefit from index-linked pensions are underpaying for them to the tune of 10 per cent, of their earnings.

Sir Brandon Rhys Williams: It is exceedingly difficult to arrive at a figure that is fair. Actuaries who take different views of the future rate of inflation and the rate of return on the type of assets in which private occupational schemes are able to invest will be able to argue indefinately. There is a political judgment to be made. An indexed pension is worth substantially more than what others are able to get through membership of private schemes.
I shall vote against any proposal that comes before the House for de-indexation of public sector schemes, although I think that the type of index that we use deserves much more study. To qualify for an indexed pension, people should be making a contribution that is seen to be balancing the additional commitment that taxpayers are making in giving indexation as a bonus.
I have spoken to a number of people about this issue and it is my guess that a 10 per cent, additional contribution would be accepted as fair when set against not only the depreciation of the pound but the way in which all paper currencies are collapsing in value throughout the world since the breakdown of the Smithsonian settlement. We are going through a time of transition between the end of the gold standard and the arrival of some other standard of permanent value, a store of value and a measure of value for our connections with each other and for international trade. While we are groping for that new point of reference, we have to have some method of protecting our minority groups against inflation. However, those minority groups must pay while they are able to do so to qualify for the benefit.
I have a great deal of sympathy with those who have suggested tht we should have accruals of one-fortieths but


I am one of those who voted against the proposition when the House considered the matter priviously. It is the general rule for approval of private pension schemes that they should not give benfits to those in retirement of more than two-thirds of their final salary. I do not know whether that is a wise rule, but it has been of such general application for so long that if we voted ourselves a pension scheme based on fortieths we would be giving ourselves the opportunity to earn pensions that would be better than any private occupational scheme or public sector scheme could give.
I realise that not many Members would be able to qualify for 40 years of service. However, it seems to me that we would be running into danger. We would have to overcome that danger by introducing further special provisions if we voted for fortieths. One could, of course, apply a ceiling.

Sir Ronald Bell: That is done already on the present basis by providing that after a certain number of contributions there should be no addition to the pension. That is already in the Act.

Sir Brandon Rhys Williams: I think that my hon. and learned Friend will recognise that to introduce a ceiling means that some Members will be working under different pay and conditions from others, although their contributions and work in the House might well be exactly the same. There is something wrong with a system if, when it is applied, it is necessary to recognise that it contains anomalies that must be rectified by frustrating the very principle that has been applied. It would be better to make the other choice, which the Government appear to have done by making it easier to bring in added years. One cannot do both.
It would be improper to accept the recommendations of the right hon. Member for Manchester, Openshaw (Mr. Morris) and the hon. Member for Sheffield, Heeley (Mr. Hooley) that we should adopt fortieths, and simultaneously allow an hon. Member to buy added years and to buy back service. If we did that, we could find ourselves in a position in which hon. Members could acquire sensational increases in their incomes after leaving the House.

Mr. Alfred Morris: The hon. Member for Kensington (Sir B. Rhys Williams) is respected for his knowledge not only of our arrangements but of those of the European Assembly. He spoke about anomalies. How can he possibly defend the decision to give a pension of £12,000 a year to the widow and child of a Member of the European Assembly who had died after one year's service?

Sir Brandon Rhys Williams: I accept the example that the right hon. Member for Manchester, Wythenshawe (Mr. Morris) has given. I hope that the House will not think that I am being priggish, but although I have the honour to be a Member of the European Parliament I have never delved into the conditions of pensions. I do not know what they are. I have the feeling that they are exceptionally generous, but I do not think that a recommendation that we should look to the European Parliament as an example would be acceptable in Britain. Perhaps it would be better if we did; but I do not believe that the public would support us if we tried to look in that direction at the present time.
I do not want to criticise the hon. Members who have recommended fortieths. I know that that principle is widely adopted in outside schemes. In a matter where a difficult choice has to be made the Government have made the right choice to allow Members to bring their entitlements from other schemes and to buy added years. I realise that some Members will come to the House in middle life with little in the way of pension entitlement, especially if they have previously been self-employed. But since the Acts passed in the early 1970s the number of such people is diminishing year by year. Soon the majority of Members elected even in their late forties or fifties will be assured of a sizeable accrual of pension rights before they become Members. It is right that a Member should be able to use that previous build-up of entitlement to consolidate his pension rights in the House of Commons scheme, rather than to enter into an accelerated pension system which might have anomalous results between one Member and another.
However, one thing worries me. The Government are recommending that the new option should be of limited duration. Will my right hon. Friend explain how he intends that that provision should be applied? Does he mean that for each Member there should be an opportunity, after he is first elected—which may last for one month, six months or a year—to declare the option of bringing in added years? Or is it intended that this new option of limited duration should be for the existing House, which might last for six months or a year, while those of us now sitting make up our minds on a once-for-all and final basis whether to use the added years option? I recognise that it is intended to be helpful to offer Members the alternative of paying fixed—instalment deductions from salary over five years. But as five years is longer than the life of most Parliaments, there is an element of risk whether Members can complete their payments.
There could be extremely tangled provisions where a Member has fallen down on payments and also forfeited parts of his earlier entitlements, and has not completed the acquistion of his new pension scheme.
I echo the remarks of my right hon. Friend the Member for Taunton (Mr. du Cann) about the pay and conditions of service for Members. It is true that on the Continent representatives of the people are valued more highly than they are here. It is notable that in countries which have relatively lately won through to democracy the representatives of the people tend to be valued more highly than they are in Britain where familiarity perhaps has bred contempt.
It is a proud thing to be a representative of a constituency in Britain. I do not think that the mass of the population wish to be vindictive towards Members of Parliament because of what one might call the Anglo-Saxon nervous breakdown. We are worried about ourselves as a nation, about our constitution, about the performance of Parliament, and about many other aspects of our public life. We do not make it any better if, as Members of Parliament, we adopt an attitude of self-disrespect or lack of self-confidence, and join in a general sense of condemnation of British public life. We should have the robust confidence to pay hon. Members what is appropriate to someone representing a British constituency. We must not devalue ourselves.

Mr. Michael English: There has been a measure; of hypocrisy in this debate. From earlier speeches, one would never have dreamt that it was a Cabinet of which the present Prime Minister was a Member and the present Leader of the House the Chief Whip which introduced inflation-proofed pensions in their present form to the Civil Service. I do not blame them for that, but there appears to be a tiny measure of hypocrisy in the arguments tonight.
The only thing that causes inflation-proofed pensions to be envied by those who do not have them is inflation. If there were no inflation the argument about inflation-proofed pensions would be futile and a waste of time. The present Home Secretary chaired the Committee of the House which introduced index-linking for the entire public income of one of the estates of Parliament. There are three estates—this House, another place and Her Majesty the Queen, whose public income is now linked to the price index. That illustrates the fact that such linkage causes little public concern. It is usually mentioned annually that the Royal income has been increased by 17 per cent., or whatever may be the current rate of inflation. It is mentioned, and then everyone forgets it, because everyone in the country knows that his own expenditure has increased by that amount. He knows that, on average, his income has also increased by something of that order.
The right hon. Member for Taunton (Mr. du Cann) pointed out that Members of Parliament are the only people whose incomes during the past 10 to 15 years have fallen in real terms. That is where the comparisons of the Leader of the House become, to say the least, stretched. I am quite prepared to accept his comparisons with the Civil Service, if the Civil Service had been prepared to accept a reduction in its real income during the past 15 years. I do not think that it should, but if comparisons are to be made they must be made fairly. As has been pointed out in the debate, the present position is unfair because Members' salaries—never mind their pensions—have fallen in real terms, while almost no one else's salary has fallen in real terms. Some have increased as much as inflation and some have increased considerably more than that. I do not know of any other group of people within Britain whose salaries have fallen in real terms. That is the point at issue.
This Government, and earlier Governments of both parties, have deliberately reduced the pay in real terms not only of ordinary Members of Parliament but of Ministers. It has been a deliberate act. I do not object if the Prime Minister values herself as worth 10 per cent, of the income of the chief executive of the Playboy Club—which is the approximate difference between their salaries. But she should not value the office of the Prime Minister so low. If she wishes, she is entitled to take no money at all. There have been Cabinet Ministers of both parties who have not taken any money as a salary. But she is not entitled to say that the office of Prime Minister is worth 10 per cent, of that of the chief executive of a gambling club.
That kind of judgment is one of the causes of the trouble in this country. I do not apply that principle merely to Ministers. It is ridiculous that the permanent secretary at the Department of the Environment should be paid hardly more than the chief executive of a county council, but that is the case. He is supposedly more or less in charge of the chief executives of all the county councils in the United

Kingdom—not in the sense that he is their immediate superior but in the sense that the Department of the Environment has a colossal influence over all local government, yet he is paid hardly any more—and so on throughout the Civil Service. To try to balance out this low level of pay by a pensions system different from that of the majority of people in the country is a further anomaly which should be cured. But both should be cured at the same time.
The Scott report came to a conclusion similar to that of the Committee that I chaired in the last Parliament as to the real solution to the problem of inflation-proofed pensions or index-linked pensions. There are two solutions. One is to get rid of inflation. But so long as we have inflation, the other solution is perfectly simple. Everybody should have an index-linked pension. Indeed, everybody has an inflation-proofed pension in the form of the State pension.
The right hon. Gentleman makes a colossal error if he thinks that everybody in this country has an occupational pension apart from their State pension. [Interruption.] Perhaps the right hon. Gentleman can persuade his PPS to let him listen. If he believes that everybody in this country has a pension in addition to the State pension he shows how out of touch he and his colleagues are. He mentioned that everybody coming to this place has rights of transferability. That is totally untrue. It is also totally untrue to say that everybody coming to this place even had a pension right before, as my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) pointed out. Roughly one-third of the working population of this country—some 7 million people—are in inflation-proofed pension schemes, roughly one-third of the population are in non-inflation-proofed pension schemes, and roughly one-third of the working population of this country are not in occupational pension schemes at all. The proportion in the latter category is declining, and has declined steadily throughout this century. It may be a little less than one-third now. Nevertheless, millions of people who work in this country are not entitled to an occupational pension. Another large sector is so entitled, but the pension is not inflation-proofed.
The third sector, which is basically the public sector, is entitled to an inflation-proofed pension scheme. Within that sector of 7 million people there is every conceivable type of scheme. One thing that was recommended by the former Expenditure Committee was that the Government should sit down and think out a set of coherent principles for public sector pensions. There is every conceivable sort of inflation-proofed pension. There are schemes in which people make no contribution at all. The Civil Service scheme is basically one of those. To be fair, I think that there is a small contribution of about 1 ½ per cent, in respect of widows' pensions or something of that nature, but with regard to the employees' own pensions it is a non-contributory scheme. There are contributory schemes. There are schemes which are funded and schemes which are not. There is even a peculiar breed of animal described as notionally funded which is not really funded.
If people contribute their working life to this country, whether they work for the State or not, if we think that they are entitled to a pension, they should have a pension. If a person works for the State as a policeman, in the Army, as a civil servant, as a teacher or a local Government official all of whose pension schemes are different—he should be entitled to his pension. But I should very much


like to know why we make the assumption that all of those pension schemes should be different. Members of Parliament are only one category. It is ridiculous for the right hon. Gentleman to make a comparison with just one small sector, which comprises 10 per cent, of the public service. The definition of a civil servant is very obscure and very limited. Governments and civil servants have defined it in that way. There are only about 700,000 of them—roughly 10 per cent, of the people who work for the State in the public sector. That is because we do not define the public sector in the way that the French do. In France, a teacher in a local authority is a fonctionnaire—a civil servant, in our terms. The French make the assumption that everyone who works for the State is entitled to similar conditions. We do not. We have this extraordinary hotchpotch. The first thing that we ought to do—I accept that we should not just do it for ourselves as Members of Parliament—is to sort out this pension mess for the whole country, and for the public sector at the very least.
No one wants to tackle this because it means that some people would gain in respect of pensions for their widows but not of their own, others would lose, and so on. However, sooner or later it will have to be done with the fairness and equity with which it ought to be done. We muddle along because no one is prepared to consider it.
The right hon. Gentleman today is taking away £10 a year. Frankly, I doubt whether that will make or break the taxpayer or any possible recipient. It is a tiny, piffling little change. Instead of making tiny, piffling changes of that character not only in our scheme but in all the other schemes—because changes are being made practically every day in one scheme or another—we should settle down and decide what the country is capable of bearing. In one sense it is an economic matter. We should decide what the country is capable of bearing in terms of the amount that we are prepared to pay our old, retired people for the service which they have given to the country in earlier years. In the end, that will have to be borne aby people in productive employment. We should settle down and work out what, pro rata to what people had earned during their working life, everyone should get. That should be protected from the ravages of inflation, if there is inflation, and it should be done for everybody.
As the Scott report points out, instead of people getting a two-thirds pension non-inflation proofed, they would probably end up with something like a 50 per cent, pension which was inflation-proofed but which was given to everyone. Instead of this extraordinary hotchpotch of schemes covering 7 million people—some of them funded, some of them unfunded, some of them contributing, some of them not contributing—we would have a proper system under which everyone, including Members of Parliament, was dealt with equally.
I turn to the issue of salaries. I am certain that the hon. Member for Kensington (Sir B. Rhys Williams) was right when he said that if we are to link the salaries of Members of Parliament to anything it ought to be the earnings of the population as a whole. We are not here just as representatives of civil servants. I do not think that we should be linked to civil servants. We are here as representatives of the whole country, and I believe what he suggested would be appropriate and accepted.
If we determined an appropriate level of salary for Members of Parliament which was generally acceptable in the country as a whole, which was not thought by most people to be either too high or too low, and if we said "That is it, we shall link it to the average earnings of the community", I believe that that would be accepted. In those circumstances, if we had a bad year when average earnings did not go up to any extent, the salaries of Members of Parliament would not go up either. If there was a good year with boom conditions, as we have had at times in the past, salaries would go up. I suggest that that is an appropriate linkage if we are to have a linkage at all.
Motion No., 5 dealing with Member's salaries, talks about the appointment of a Select Committee and refers to
a designated group of outside occupations".
I hope that it will be possible to designate everybody in gainful employment as the group. I do not think that that is an inappropriate way of tackling this matter.
When we say "Members' salaries" I hope that we shall also deal with the salaries of those in ministerial office. As I said earlier, there is no reason why a Minister, if he happens to be a rich man, has to take a salary from the taxpayer. However, the office should have a salary attached to it.
I have never been able to understand why Members of the House who become Ministers should lose their salary as a Member of the House of Commons. The one thing they do not do is stop being a Member of the House of Commons; but they do stop receiving an income from an outside occupation.
It would be simple to get the Inland Revenue to calculate how much, on average, hon. Members lose. The Inland Revenue is bound by law not to reveal the income of any individual, but commonly, for all sorts of purposes, it produces collective statistics. It would be possible to run the great computer in such a way as to show what one may lose by becoming a Minister by the average of his colleagues' outside earnings. It would be a fair basis of payment on top of an ordinary House of Commons salary. Therefore, I hope that the Select Committee will realise that "Members" include Ministers and that the terms of reference are adequate for it to consider that problem as well.
I must declare an interest in the following matter. Having spent a number of years in the House as a bachelor, I married and I now have two tiny children. It is a point that not all hon. Members are so aged and decrepit that their children have grown up. We are not all grandfathers who represent the country in the House of Commons.
We have discussed the result of our peculiar pension accrual rate at great length. Hardly anyone, with the exception of my hon. Friend the Member for Dagenham (Mr. Parker) who is Father of the House, is likely to sit for 40 years in the House in the way that a civil servant can sit for 40 years at a Civil Service desk. In that respect, we are much more akin to judges. I do not wish to stress that comparison too much. Judges can reach their top pension, which is only half pay—not two-thirds—after 15 years. That is slightly less than the average time that hon. Members are in the House.
Therefore, in that respect, hon. Members need a scheme that is not compared to that of the Civil Service. I do not wish to compare the pay of hon. Members to that in the Civil Service. I do not think that Civil Service trade unions wish hon. Members' pay to be compared to theirs.


I know that the right hon. Gentleman had a brief which had been given to him, his predecessor, and his predecessor in another Administration, but it is ludicrous that he should suggest that there is an obvious comparison between Members of Parliament and civil servants. If Civil Service trade unions tell him that there is such a comparison, I hope that he will point out to them that in order to make the comparison exact, they would have to resign from the Civil Service after 15 or 16 years. That is nonsense. That becomes nonsense and not just for the individual.
If any one of us who happens to be married dies tomorrow, his wife will get a pension. That pension will be calculated as half what the hon. Member would have received. His children may receive a pension of a quarter of what the hon. Member would have received if he had lived to the age of 65. Notionally he would age to 65 the day he died but the years of service which he had actually spent in the House would be considered. The average Member spends about 15 or 16 years in the House. In other words, he has about a quarter of the possible sixtieths. Therefore as a pensioner. He has a right to about a quarter of his salary. If he dies, his wife is entitled to one-eighth, which is slightly less than £1,650 per annum. If he has a child—up to two, as there is a limit on the number—the child would be entitled to a pension of about £821 per annum. My figures are not exact, but they are approximately correct.
Do we think that that scheme compares in any reasonable way with the sort of provisions in other pension schemes for widows and orphaned children?
We must always remember those who are not in occupational pension schemes. We should deal with that matter, as the Committee that I chaired formally recommended. However, we should deal with the matter not only on behalf of the country but on behalf of ourselves. While we have the incredible hotchpotch of pension schemes we should recognise that even if we do not wish to do anything for ourselves—and many hon. Members justifiably and understandably do not want to do anything for themselves—we might at least make provision for those of our colleagues who leave widows and orphans behind. If we wish to be mean to ourselves that is one thing; to be mean to our colleagues' spouses and children is quite another.

Sir Ronald Bell: I agree largely with what was said by my right hon. Friend the Member for Taunton (Mr. du Cann). It is regrettable that the matter comes up over and over again.
It is not right to say that it is an unfortunate moment for the matter to be considered. The Government are ignoring the motions that have been passed and are bringing these matters up again and again until, I suppose, the time arrives when there is no longer a majority for them present in the Chamber. That is how we came to be lumbered with the present unwieldly Hansard. The House rejected it twice. The Government ignored this and kept bringing it up again and again, until the motion was eventually passed. Having been passed, it was implemented.
It is a long time since the House passed the first motion for the linkage of hon. Members' pay. It was to the pay of an under-secretary in the Civil Service. The matter has always been ignored. It is now suggested that we should appoint a Select Committee to discuss it. The proposal appears to be that in the first Session of each Parliament

there should be consideration of the general level and that the indexation should concern only the bringing up to date of the figure in the succeeding years of that Parliament.
When the House repeatedly passed the motions on indexation it was with the overriding intention that the disagreeable matter of hon. Members' pay should be taken out of annual debate once and for all.

Mr. du Cann: Yes, it was.

Sir Ronald Bell: It was accepted throughout the House that we were choosing between two alternatives that were not entirely agreeable, but we thought that the lesser evil was to take the matter out of regular debate and to settle for a considerable period the level at which our remuneration would be fixed. We should then be able to forget about it and not have the constant nagging of these debates, which is not only unsatisfactory but distasteful.
That purpose will not be achieved by the motion. It will remain in this form, as far as I can see, every year. Even when the Select Committee reports it will be in the form of a recommendation. It will have to be put before the House each Session, with the Government's amendment or recommendation that it be accepted or not accepted, or accepted with alterations. Once again, every year we shall have the same sort of recrimination and even, at times, acrimony. I see no purpose in that exercise. If we are to have an annual debate, let us forget about the linkage and the Select Committee and deal with it on its merits.
The best course is to have a linkage. There are objections. We have rehearsed them over and over again. It is not an ideal course of action. I say only that it is better than the other. We should adopt it. I am sorry that this ambivalent motion is put before the House.
I turn now to the question of notional salary. I do not like notional salaries for pension purposes. We got into them through modifying the Boyle recommendations some time ago. One felt that it was the right thing to do. There were hon. Members who would be retiring. It was hard on them that they should retire with a pension considerably diminished by the sense that prevailed in the House that we should exert severe economy upon ourselves, which we might change later. However, they would not be here to benefit by the later change.
As for the enlarged comparison that my right hon. Friend the Leader of the House was making, I think that he was proceeding on the wrong basis. What we are discussing is not comparable with what has happened in the Civil Service, whose increase in pay in the last Boyle recommendations was shaded down at the same time as our increase was shaded down.
We were concerned then not with an increase but with the consequences of the previous shading down, which meant that instead of the £12,000 figure being made effective at once, which I think Boyle recommended, it was said that it would take effect in three stages. At the same time, we were told that although it would be diminished or staged, in that sense, there would not be the further loss that arose as a result of the inflation that took place during those three years. When the last recommendation came up, the undertaking was that we would not have the super-added loss of inflation affecting the already ordered deferment that was diminished. That is why there is a total distinction between the Civil Service and ourselves. I do not think that my right hon. Friend need be persuaded by the analogy that he made.
That is all about virtually nothing. It apparently amounts to about £10 a year. I do not think that we should spend much time on the matter. Equally, if the House votes for it, I do not think that my right hon. Friend need worry about precedents in the Civil Service.
I wish to turn to a matter of more importance concerning the fortieths. We have been through all this at least twice before. I believe that forty-fifths would be the right solution, giving a period of 30 years. I am not, however, worried whether it is fortieths or forty-fifths. I think fortieths would produce a period of about 28 years.
I think that all hon. Members are agreed that if the existing system of sixtieths is regarded in isolation, giving a period of 40 years, it is nonsense. Even the hon. Member for Dagenham (Mr. Parker), the Father of the House, would not qualify for a full pension for another nine years. Viewed in isolation, apart from the question of credits coming from outside and bearing in mind that the average age for entry is 36 or 37, and that if he were in for 40 years an hon. Member would, on average, lose at least 10 years in absences from the House, it can be seen that he would qualify for a full pension at the age of about 86 or 87. The cost to the fund of a full pension starting at 86 or 87 is very small. I am not surprised that the hon. Member for Dagenham told us that there was an enormous sum in the pension fund. I think he said that the amount was £22 million.

Mr. Parker: £20 million.

Sir Ronald Bell: The hon. Gentleman says £20 million. I am not surprised. So long as we keep a 40-year rule I think that we will shortly be able to pay off the national debt accumulated in the pension fund. It is not what one would call a generous provision for hon. Members. It may be said that that is so but that there is a provision for bringing in pensions to which entitlement has already been created.
I refer to transferability. As has been pointed out, that applies only to a proportion of hon. Members. I should have been much more interested in this argument if my right hon. Friend the Leader of the House had given us figures. Of course, I should not have expected names. As the Fees Office knows, so my right hon. Friend must know the proportion of hon. Members who have transferable pensions that have been brought into account, and their average value. It would be interesting to know that.
Given the present age distribution of hon. Members, I strongly suspect that the number with significant transferable pensions is negligible. Of course, the position will change during the next 20 years. However, after hon. Members have been eliminated on the grounds of age, unsuitable occupation, previous self-employment, and so on, the number must be negligible. I declare an interest. Like my right hon. Friend the Member for Taunton I am in the happy position of being able to earn a living outside the House. I am not as dependent on the provisions of the House as are some. However, that is not the point. Many hon. Members will find that on retirement their parliamentary pensions will be their only source of income. Let us be clear about that.
For the next 20 years at least, the transferability argument will be a minor one. I do not know what the compromise brought forward by my right hon. Friend consists of. I should have been much interested if he had

told me. It is all very well to say that the details will be published when they have been drawn up, but it means buying a pig in a poke. Will the proposal apply to all hon. Members or only to new hon. Members? If it applies to all hon. Members for how long will it do so? Does it apply only to hon. Members below a certain age? We do not know the answers.
Why should we be so worried about duplication? For example, on a 30-year basis there will be duplication only in the case of those hon. Members who remain in the House for more than 30 years. They might receive more than a two-thirds pension. However, there will not be many such hon. Members. Is that such a terrible evil? Under the existing scheme there is a cut-off date for those fortunate enough to have 40 attributable years. I understand that after 45 years' service that does not count, and that one can receive a three-quarters pension but no more. If there is an anomaly, it is not a new anomaly. I do not see why those hon. Members who remain in the House for as long as the Father of the House should not end up with more than a two-thirds pension. That does not strike me as an argument against this proposal.
A memorandum from the former Leader of the House was distributed among hon. Members. I have read it carefully, but I was not impressed by its argumentation. The document listed several systems, but dismissed them all. We are told that no one is comparable to a Member of Parliament. However, no sooner has that been said than the Leader of the House argues that civil servants are comparable, and that we cannot have anything that they have not got. When it is proposed to link—as the resolution did link—Members of Parliament with under-secretaries, it is said that that is wrong because there is no comparison between civil servants and Members of Parliament. We cannot win.
I turn to the provisions for judges. The Bill that we have recently seen is a consolidation measure. It is not based on fortieths. I know that there is a reference to fortieths in it, but that is in respect of particular years. Indeed, I think that it refers to a 15-year period.
The fact is that for the senior and middle judiciary the period is 15 years for half-pension. That means that thirtieths operate. In my opinion, that is right. It is based upon the average age of appointment and I expect that it takes into account the fact that most of those who are appointed judges have been in self-employment and will not have any transferable pensions. What opportunity they have of receiving a private pension is a matter of speculation.
Although the average period of service for hon. Members is 16 years, compared with 15 for judges, I do not suggest that we should operate on thirtieths, but I think that the argument for fortieths is difficult to refute. I therefore hope that the House will reaffirm its insistence of fortieths when the time comes to vote.
If my right hon. Friend the Leader of the House subsequently brings forward a scheme to plug all the holes that have been mentioned in this debate I am sure that the House will be willing to rescind that resolution, but I believe that we should reaffirm our decision now. It should be implemented unless the Government can produce a proposal to cover all hon. Members and not merely the minority who have attracted most attention.
There is no amendment dealing with linkage; there is only the motion. Frankly, I hardly know what to do about it. It is a fairly useless, almost embarrassing, suggestion.


If it is defeated, or if it is passed, we are no nearer a solution to the problem on which we have spent so many hours over the years. We are in a most unfortunate situation. I realise that I and my right hon. and hon. Friends and others are partly to blame, because no

amendment was tabled in time. Therefore, it is our own fault, It hardly matters which way hon. Members vote on the motion dealing with Members' salaries, because it is such nonsense. But when it comes to fortieths, I hope that the House will reaffirm its view.

Mr. Michael McGuire: I am delighted to follow the hon. and learned Member for Beaconsfield (Sir R. Bell). He should not reprimand himself about the failure to table an amendment on the subject of linkage because, as he rightly said at the beginning of his speech, the exercise in which the Leader of the House is indulging is intended to overturn the express will of the House on a free vote. I hope that that will be maintained tonight. I imagine that the Leader of the House will then decide, having had three or four bites at the cherry and the House having expressed its view, that we must abide by it on the matters of linkage and fortieths.
We had comprehensive answers to the motions in relation to Members' pensionable salaries from my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris). He reminded us of the explicit terms in which the Prime Minister wrote in that regard. She is not the first Prime Minister to find a convenient refuge in the state of the economy at a particular time, especially when the reports are presented.
I shall say no more on the subject, except to point out that we do get ourselves into a tremendous frazzle on the subject of Members' salaries. In fact, we are paying for our own lack of courage as Members of Parliament. We probably deserve to be punished—at least those who dodge the issue.
In 1911, Members of Parliament received their first payment as Members. I am not familiar with the arguments that were advanced at that time. I imagine that they were similar to some of the arguments that we have heard tonight from some hon. Members. Then in 1937 Members of Parliament had their first increase. In 1950, there was another increase. Between 1950 and 1957, when the next increase came, an attendance allowance was paid. I believe that that was scrapped.
Then in 1964 there was the Lawrence report. It had been agreed that everybody would abide by it. Apart from the time when the right hon. Member for Sidcup (Mr. Heath) was Prime Minister, when a report was presented, that was the first occasion on which a report was implemented. But we have to remember that on each occasion the report was implemented only for Back Benchers. So again the issue was fudged, and some reason was found for not wholly accepting the recommendations.
In December 1970, one of our late lamented Members, Lord Pannell—Charlie Pannell in this House, known unofficially as the "shop steward"—together with a present Member of the other place, Lord Houghton—then Mr. Douglas Houghton, the Member for Sowerby—sought by a Private Member's Bill to regulate the position and to take it out of the hands of Members of Parliament. But the then Leader of the House—the present Home Secretary—persuaded them to withdraw it, on the ground that the Government would set up a body which would do what they wanted. Subsequently the Boyle Commission was set up. It is interesting to recall the cri de coeur of Boyle: "If you want us to report as an independent outside body on what we think should be the terms and conditions of Members, please abide by it. Do not fudge it, because there is no point in our spending many hours in deliberating and in research if at the end the

issue is to be dodged because of some political convenience or because there is some political mileage to be obtained from doing so."
The members said "If you are going to dodge the issue, please do not set us up and do not entrust us with this charge."
They were quite right. In other words, we are paying now for our own lack of courage at that time.
The Leader of the House, when he was speaking to the combined motions, said that what we do here is monitored outside, and that the public notice what we are doing. I shall tell the right hon. Gentleman why I think that the public do not notice it. During all the time in which I have been in this House and there has been fudging on the question of Members' salaries, and delay for one reason or another, nobody has come to me and said "Michael, you are doing a wonderful job and I admire your sacrifices and those of your colleagues." Incidentally, I have never once had the question raised by a member of the public when we have had an increase in salary.
The problem is that if we delay giving ourselves an increase for one reason or another, the eventual catching-up exercise will involve a large lump of money which, in percentage terms, will perhaps be higher than the going rate that the Government of the day—Labour or Conservative—are trying to impose. If that happens, it will seem that Members of Parliament are giving themselves special treatment. Everybody will forget the amount of money that Members of Parliament have forgone for political reasons.
I suggest to the Leader of the House that the public do not take any notice, but that if they did they would say "If you chaps want to give yourselves the proper terms and conditions of pay for the job that you do, that is entirely a matter for you." Those Conservative Members who disagree will be able to make their contributions later. I maintain that the public do not take any notice, but if they did the message would be "You are masters of your own destiny. If you cannot fight for yourselves, you will fight for nobody else."
I believe that my experience in this respect is the same as that of every hon. Member. Nobody has ever congratulated me on forgoing a rise in salary, neither have I been condemned by anybody for receiving a rise.
I turn to the crux of the matter, which is contained in the motions on salaries and pensions. The motion on salaries will once again be an exercise in fudging the issue. The right hon. Gentleman was quite right to remind us that no Government will hand over to a body of this House or to an outside body the absolute right to say "You have to implement what we do." Again, there will be that fudging of the issue. So what we are doing is going back on the old treadmill. If the Government want the expression of opinion of the House it has been given—

It being Ten o'clock, the debate stood adjourned.

Ordered,

That, at this day's sitting, the Motions relating to Members' Pensionable Salary (Expression of Opinion), to Members' Pensionable Salary, to Members' Salaries and to Members' Pensions may be proceeded with, though opposed, until any hour.—[Mr. Brooke.]

Question again proposed.

Mr. McGuire: If they want the free expression of opinion of the House, it has been given on two occasions. Although Boyle was not in favour of the linkage—and it


went into the arguments as to why it was not in favour—it said that if it was the express will of the House it was giving an indication of how that should be done. I would much rather accept that. The more we fudge it, the more difficulties we are going to get into. We should grasp the nettle and get the linkage arranged.
Every hon. Member knows the grade which was suggested. I think it was the hon. and learned Member for Beaconsfield who asked when the proposal was made. I hazard a guess that it was 1973, when we were in power. As a result of a Back-Bench rebellion or revolt on both sides of the House we managed to get that freely expressed opinion of the House that we should be linked to a certain grade in the Civil Service. Had that been carried into effect, it is interesting to note that our salary now would be £5,000 or £6,000 higher than it is.
I want now to come to the major issue of Members' pensions. Earlier when my right hon. Friend the Member for Openshaw was replying he mentioned certain countries and said that I had been kind enough to give him some detail about the poorest member of the Community of Ten, the Republic of Ireland. It may be the second poorest member now that Greece is in the European Community.
Members of Parliament in the Republic of Ireland are subject to parliamentary pressures. Like us, they have to stand at elections which take place, as in our country, at a date determined by the Prime Minister choosing the most suitable wind. So they are not immune. They are not elected for life. They have to stand and justify their actions, though the method of election is different, being by proportional representation.
What is done in the Republic of Ireland? They have a very sensible system. Not since 1973 have they had a debate on salaries. They set up a review body identified with a national wages agreement. Hon. Members may be interested to know that the salary of a Back Bench Member of the Dail will go up on 25 February to nearly £13,000; there is a period when it may be prayed against in a negative form but the effective date is 25 February.
This will be the second increase in a year. They had an increase in June 1980. The salary that will be paid to them in February, backdated to take account of the last two recommended increases, is the result of a review body, an analogue being taken and transposed for a Member of Parliament. They have an agreement on both sides of the House; there is a commitment from the Government and the Opposition that nobody will exploit it for political mileage purposes and it goes through comfortably.
The question of pensions for Members of Parliament in the Republic of Ireland was also settled a long time ago. They have a pension scheme based on fortieths. The average scheme outside is based on eightieths so the people of the Republic have recognised that there are special conditions related to Members of Parliament. I want to refer to those that affect me because one's personal experience, as was said by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), is relevant.
I came into the House at the age of 38½. As a miners' Member I was below the average age. The average age of Members who come from the pits, whether as a branch secretary as I was, or straight from the coal face, as some of my colleagues did, is over 40.
Arrangements were made to enable Members to buy added years. The lump sum provisions were beyond me. Twelve months ago I would have needed about £18,000

and I did not have that kind of money. It became possible to buy added years by paying a monthly contribution in addition to the ordinary pension contribution.
Because we have dodged the issue of giving Members a proper salary, we have an agreement whereby we receive a notional salary for pension purposes. The National Coal Board pension came in only in 1952. I contributed to the scheme right from the start. I became a local union official in 1957, and my pension was frozen at about l0p a year. I was to get it when I was 65. So I had no pension at all and I wanted to buy added years. Here I echo the tributes that have been paid to the staff in the Fees Office who have been helpful, sympathetic and understanding. My tribute is as sincere as the other tributes that have been paid. They have helped me enormously.
The Leader of the House may be interested in this because he mentioned a new arrangement for buying extra years. The calculation for me was based on the actual salary. The increase has been deferred against the wishes of Boyle. It was paid in one half and two quarters, the last quarter being paid this year. Instead of my calculation being based on £13,150, which is the notional figure, it was based on £9,450 when I first applied. Because of the method of calculation and the Inland Revenue limits I could buy only three years and 328 days. Had the calculation been based on the notional salary, I would have been entitled to another year. I have, therefore, been deprived of a year because of this barmy system of a real salary and a notional salary for pension purposes.
I ask the Leader of the House to look into this. The argument that by buying added years a Member can reach what would be achieved by a scheme based on fortieths does not apply in my case and in the case of many other Members.
I hope hon. Members will take their courage in their hands. I know those who are on the payroll have to earn their keep, but a scheme based on fortieths for Members of Parliament is not out of line. Under the present arrangements, even with my added years, I shall not be entitled to a pension worth half my pay until I am nearly 70. People outside the House would not agree to arrangements of such a nature, bearing in mind the age at which most Members enter the House. The system is not worthy of a democratic country such as ours.
I ask the right hon. Gentleman to have regard to the will of the House which has been expressed on two previous occasions on the question of linkage and salaries.
In July the House expressed itself forcibly on the fortieths scheme. The Leader of the House referred to the document circulated in October. It was really a Civil Service brief. Every possible argument in favour of us being tied to the Civil Service was used. When it was unfavourable to us, but when it was favourable to argue the other way that argument was dismissed. It was a "Heads we win, tails you lose" proposition.
I do not believe that the public will be outraged if British Members of Parliament are equal only to the second poorest country in the EEC—the Republic of Ireland. We are still way behind most of the other Western European countries in terms of pension arrangements. We should have tackled the problem a long time ago.
Most hon. Members will remember the chap that I succeeded, Mr. Tom Brown. He was a miner and a miners' agent. He came to the House when he was 57. We used to exchange the usual small talk and talk shop. I used to visit him after I became the Member for Ince. One day


he became angry and bitter. He said that because there was no pension as of right in his time he had to submit to a means test. It was generously conducted compared with the vigilance of the DHSS which pursues people it believes to be receiving money under false pretences. He told me that he had been in the House for 22 years and that the maximum that he could claim was a very small amount. He felt that he deserved better. The public would agree with him.
We have fudged the issue for too long. I do not think that we are being over-generous. I am certain that the public will not think that we are being over-generous. I urge hon. Members to follow the example of the right hon. Member for Taunton (Mr. du Cann), to whom we owe a great debt. He said that it was easier for him, with his outside income and interests, to make the speech that he made than it would be for me. The obvious inference is that I am feathering my own nest and trying to confer on myself considerable benefits which are not applicable to others.
The arrangement for judges is sensible. I do not want that arrangement. They have special needs. A man becomes a judge when he has shown his mettle and a degree of maturity. Inevitably he will be a minimum of 50 years of age when he becomes a judge. To give him a pension of half pay at 65 is not unreasonable. To give Members of Parliament a reasonable pension of half pay after 20 years is also not unreasonable.
We would not be out of step with any other Western democracy. In most cases we would still be far behind. We would just about have parity with the Republic of Ireland. I hope that Conservative Members will defy the Government, because the Government are defying the expressed will of the House. I hope that they will follow what was done in July and earlier and vote for the amendment moved by my right hon. Friend the Member for Openshaw.

Mr. John Bruce-Gardyne: I have news for the hon. Member for Ince (Mr. McGuire). I do not know about the Opposition Whip, but we have a free vote on this issue.

Mr. McGuire: We do, too.

Mr. Bruce-Gardyne: Then there is no problem. I do not understand the argument about defying the will of the House. If the House votes in favour of the amendment in the name of the right hon. Member for Manchester, Openshaw (Mr. Morris), that is the end of the matter. The House will vote in that way and the Government will accept the decision. I shall be only too delighted to support my right hon. Friend in resisting the amendment.
My hon. Friend the Member for Kensington (Sir B. Rhys Williams) made the case most effectively when speaking against fortieths in the fortieths versus sixtieths argument. I was swayed by the arguments advanced by my right hon. Friend the Leader of the House in introducing the debate. I believe that the opinion previously expressed by the House was mistaken and I shall support my right hon. Friend in resisting the amendment to the motion relating to pensions.
I find the motion numbered 4 profoundly unsatisfactory. For several years, for reasons which we all

understand, we have had our pensions related to a notional salary which we did not have the nerve to pay ourselves. I am delighted that we are moving back into line. It seems that we are making honest men and women of ourselves. I shall be delighted to support my right hon. Friend in resisting the proposition of the right hon. Member for Openshaw.
I shall devote the bulk of my remarks to the motion relating to salaries. Persuasive and eloquent as my right hon. Friend always is, I am bound to confess that on this issue he left me utterly unconvinced, as did my right hon. Friend the Member for Taunton (Mr. du Cann), whose arguments I listened to with great care. I listened attentively to my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell), with whom I frequently find myself in considerable agreement, not least when he seems to be in a minority. I found myself in disagreement with both my right hon. Friends and with my hon. and learned Friend.
Like my right hon. Friend the Member for Taunton, I have the opportunity to earn a substantial part of my income outside the House. I agree with my right hon. Friend that it is essential that we ensure that Members are paid to do their job. I agree with him entirely. The question is how we arrive at that solution. It is here that we have been and are in considerable danger of doing ourselves a mischief. My hon. and learned Friend complained that the motion relating to salaries does not advance us anywhere because there is no obligaton on the Government to accept the conclusions of the independent body which it was suggested the Select Committee might devise. That is true. I believe that we are chasing a chimera. There is no way in which the House can divorce itself from the responsibility of deciding about what it pays itself. It is an illusion for us to imagine otherwise. We have to take those decisions and always will have to.
However, buried—no, not buried, but exposed in the terms of the motion relating to salaries I find a proposition which is wholly unacceptable. It is said that we should set up a Select Committee
to give further consideration to the desirability and possible method of conducting reviews of Members' salaries by an independent body once during the first Session of each Parliament and of adjusting such salaries during the periods between such reviews by reference to increases in the remuneration of a designated group of outside occupations.
That was described as a basket of analogues. It was the right hon. Gentleman's brother, the right hon. Member for Manchester, Wythenshawe (Mr. Morris) who used that phrase. I do not think that is quite right. I should describe it as a bandwagon of analogues. We are seeking something to climb aboard.

Sir Ronald Bell: Does my hon. Friend not think it might be a bandalogue?

Mr. Bruce-Gardyne: My hon. and learned Friend is trying to confuse the passage of my thought. I shall not pursue him down that line. I do not believe that we in this House—I am appalled that we should imagine that we could—should establish a Select Committee to investigate the possibility of finding comparisons for ourselves, while, at the same time, we have, rightly, sent the good Professor Clegg back to confuse the minds of his students at Warwick university. We have suspended—I wish I could say we had abolished—the Civil Service Pay Research Unit.
My right hon. Friend the Member for Taunton said that these are not analogous, because the conclusions of such a comparability study would not be mandatory. I think that that was the phrase he used. If they are not mandatory, what the hell is the point of the whole suggestion? I thought that the whole idea was to get the study out of the body of the House and away from the embarrassment of discussing it. If the comparisons and conclusions are not to be mandatory we will throw the matter back into the House, as I believe we should.

Sir Ronald Bell: In every Session.

Mr. Bruce-Gardyne: As my hon. and learned Friend says, in every Session. If we institute a system of comparability, we shall be treating the public with contempt. We are saying that we should impose one law for the Civil Service, one law for wide areas of the public sector and another law for ourselves. I do not believe that that is defensible for a moment. Alternatively, my right hon. Friend says that it is not mandatory. In that case, what the hell are we doing because the argument will come straight back to the Floor of the House once a year?
In short, either this proposition in the motion relating to salaries is utterly meaningless and purposeless, as my hon. and learned Friend the Member for Beaconsfield suggested—in which case we should throw it out on those grounds—or we are indeed seeking to organise for ourselves a binding system of comparability which we have, rightly, thrown out for many of those for whose employment we are directly or indirectly responsible. I suggest that that is utterly indefensible.

Mr. Michael McGuire: I am trying to follow the hon. Gentleman's argument. Would he ever give Members of Parliament an increase in their pay? If so, how would he set about doing it?

Mr. Bruce-Gardyne: Yes, I would give Members of Parliament an increase. I should set about it in the way that we have always set about it. We would vote for it. There is no escaping our responsibility to determine and vote for the salaries that we pay ourselves. It is no good our imagining that we can do that. For several years in successive debates we have tried to devise some wonderful scheme that will exonerate us from all responsibility. It is my case that there is no way that that can be done.
The Government want to establish an independent body. For God's sake, we have an independent body—the Boyle commission. As I reminded my right hon. Friend the Leader of the House when he spoke at the begining of the debate, year after year we told Lord Boyle that we did not like his sums and that we were devising different sums. That was quite right, because I do not accept that Lord Boyle or anyone other than this House should decide what we should be paid. Successive Governments have been right to take a view on these matters, and to amend the conclusions put before us by review bodies. That being so, what on earth is the point of the motion? For my part, I find it wholly unacceptable. It is either meaningless or hypocritical to those for whose employment the House is responsible. The example that we give is irresponsible to others. I am bound to vote against it in the Lobby tonight.

Mr. Nick Budgen: I shall be brief. I shall not attempt to detain the House

through argument, but simply wish to make a few short assertions which relate entirely to the motion relating to salaries.
I agree with my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) that to send such a difficult decision to a Select Committee is a fudge. I am neither so priggish, nor so young, as to be opposed to all fudges. But I suggest that this fudge—though no doubt it will be widely recommended as something that can be easily forgotten—is dangerous for the Government to recommend to its payroll vote, and to invite the Leader of the House to usher in with such sympathy.
By sending the matter to a Select Comittee in such an efficient and sympathetic way, the Government are giving the impression, first, that they are in favour of linkage and, secondly, that they still adhere to the idea of comparability. I agree with my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) that linkage is complete nonsense. It is an insult to all Members of the House. I suppose that we are entitled to insult ourselves. If we wish to say that our unique occupation is comparable with some amalgam of activities within the public sector, I suppose that we can insult ourselves in that way.
I disagree with my hon. and learned Friend the Member for Beaconsfield that it is possible to push Members' pay away from the vulgar gaze of the public, quietly collect our salary cheques, and hope that no one ever inquires about what we receive. At the same time, he and I and others will have a splendid time making offensive noises about, for instance, the pay of Members of the European Parliament. We would not expect for a monent that anyone would be so offensive as to apply the same system to ourselves.

Sir Ronald Bell: My hon. Friend will appreciate that it is only in the interests of the brevity of the proceedings that I do not denounce them now.

Mr. Budgen: I appreciate that it is only because of my hon. and learned Friend's consideration for the House that he does not do so now.
On comparability, I agree passionately with my hon. Friend the Member for Knutsford. This was one of the first big mistakes that the present Administration got themselves hooked on. [HON. MEMBERS: "Why only the first?"] I hope that it will be a long Administration. Like all Administrations, it will therefore make a number of substantial mistakes. The first great mistake was in relation to the Clegg commission. It was most unfortunate that just before the last general election we said that we would honour the various claims that were then being considered by Clegg. We have had extreme difficulty in getting off the hook. We are now disengaging with difficulty, but we are not yet entirely disengaged. As I understand it, all that we have said is that the pay comparability exercise will be held in abeyance for one year. I believe that far more than that is required. We need a successful frontal attack upon the whole concept of comparability.
It is scarcely consistent with that philosophy to say that the principle of comparability should be extended to the pay of Members of Parliament. It is therefore not easy to understand how the Leader of the House, admittedly in his ambivalent role of Leader of the House and also as a Minister in the Government, can sympathetically recommend this particuler fudge to the House.
I therefore hope that all those who are free to vote in this way will support those of us who wish to oppose the motion relating to salaries.
Finally, there is also a provision for adjustments within reviews. It is a form of indexation. The Tory Party has flirted with indexation in its time. I believe that after 10 March our previous flirtation with what I call—it is quite a mouthful—the Rooker-Wise-Lawson amendment will be something that we shall come to regret and to find very embarrassing.
I hope that we shall not go along with the motion relating to salaries, because it is a small extension of that rather unwise philosophy.

Mr. Pym: I think that after just over four hours in discussion of these motions the House will now wish to reach a conclusion. Having heard all the speeches that have been made throughout the debate, one is very conscious of what a difficult matter this is. I think that it is particularly difficult in this round, in view of the history of the matter.
I was interested in what my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) said about comparisons with the Civil Service. I had much sympathy with what he said, because he will remember, as I do, that only a few years ago linkage with the assistant secretary grade of the Civil Service was the fashionable view in the House. He did not support it, and neither did I. But since then things have changed.
My right hon. Friend the Member for Taunton (Mr. du Cann) said that Back Benchers' advice had not been properly taken and that successive Governments had not done their full duty by the House. I have some sympathy with that view. I should like to say, however, that I tried to frame these motions in the light of earlier debates and in the light of my predecessor's consultations.
I do not think that the House would expect or wish me to answer all the points that have been raised. I should mention in particular, however, the advice that we received from the hon. Member for Dagenham (Mr. Parker), who spoke from his long experience of what I believe is about two and a half times the average length of service. He took us back to the times before the war, and reminded us that salaries in the House have always been low.
My right hon. Friend the Member for Taunton also referred, quite rightly, to the fact that we receive less by way of salary and remuneration than members of almost any other Parliament in the democratic world.
The Father of the House said that it was not possible to compare the job of a Member of Parliament with any other job. I have a great deal of sympathy with that. The right hon. Member for Manchester, Openshaw (Mr. Morris) mentioned the risks attached to the office of a Member of Parliament.
The Father of the House also mentioned specific ideas, one in relation to the pension fund. The costs that were put before hon. Members in my predecessor's paper have taken the fund's assets fully into account. However, I shall certainly consider that suggestion and all the other suggestions put forward, including those from hon. Members whom I regard as experts. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) made a

thoughtful contribution on indexation. My hon. Friend the Member for Somerset, North (Mr. Dean) has expertise here. It would be unfair not to include in the hierarchy of experts the hon. Member for Nottingham, West (Mr. English). I shall consider all the points made and, where appropriate, write to hon. Members with the answers.
The motion dealing with the Select Committee received the most attention. It had a mixed reception. It had a number of passionate critics and a greater number of less passionate supporters. The fundamental point is to what extent linkage helps us. The right hon. Member for Openshaw said that it was hoped that the arrangement would keep the issue out of the public eye.

Mr. Charles R. Morris: Out of political controversy; not out of the public eye.

Mr. Pym: I thought that I wrote down "public eye", but "political controversy" will do.
My hon. and learned Friend the Member for Beaconsfield took the same view, but my hon. Friend the Member for Somerset, North was of the opinion that linkage would bring the pay of Members of Parliament further into politics.
My hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) said that whatever happened this House could not escape responsibility for the level of hon. Members' remuneration. It so happens that that is my personal view. Whatever steps we take, at the end of the day we cannot escape that. However, we may be proved wrong if we proceed with the motion, which my hon. Friend will oppose.
Several other points were raised. The hon. Member for Sheffield, Heeley (Mr. Hooley) asked why the Select Committee was so narrowly restricted. The answer, basically, lies in the discussions that my predecessor had with many hon. Members. It was felt that this was the best direction in which to go. I take the hon. Gentleman's point about the composition of the Committee. It needs to be widely spread.
There was discussion about the fortieths. A number of hon. Members felt that the motion voted on last summer should have been accepted and that that should have been the end of it. However, there were many consequences flowing from it, which the Government believed it right to put before hon. Members, and that was in part the origin of the paper that was circulated. The motion on hon. Members' pensions seeks to overthrow the decision that the House voted on last summer, but it nevertheless takes into account the points made and proposes an alternative method for meeting the need that was felt on both sides of the House. In that sense, it is a genuine attempt to be as sympathetic as possible to the views expressed in the House.
I hope that we can now come to a conclusion. I repeat that in the Government's view the right level for pensionable salary is £13,150. A number of hon. Members have spoken against the idea of a notional pensionable salary. The Government support that view.
I think it is the general wish that we should set up the Select Committee and take the issue from there. On the matter of hon. Members' pensions, I hope that after the arguments that I have put the House will feel that whereas this does not fulfil what they voted for in the summer it is, by another route, a means of achieving the same


objective. What is more, it is one that is more individually designed to the differing needs of hon. Members and their circumstances.
On that basis, I hope that we can now come to a conclusion. I hope that the House will decide to support the Government in the Lobby, but, of course, whatever is decided is decided.

Amendment proposed, leave out £13,150', and insert '£13,750'.— [Mr. Charles R. Morris.]

Question put, That the Amendment be made:—

The House divided: Ayes 44, Noes 121.

Division No. 78]
[10.41 pm


AYES


Beith, A. J.
Dubs, Alfred


Bell, Sir Ronald
du Cann, Rt Hon Edward


Best, Keith
Fisher, Sir Nigel


Bottomley, Peter(W'wichW)
Gardner, Edward (S Fylde)


Campbell-Savours, Dale
Garrett, W. E. (Wallsend)


Cohen, Stanley
Hamilton, W. W. (C'tral Fife)


Crowther, J. S.
Harrison, Rt Hon Walter


Cryer, Bob
Haynes, Frank


Cunningham, G, (Islington S)
Hooley, Frank


Dalyell, Tam
Kilfedder, James A.


Lamond, James
Ross, Stephen (Isle of Wight)


Leadbitter, Ted
Shersby, Michael


Leighton, Ronald
Soley, Clive


McDonald, DrOonagh
Spriggs, Leslie


McGuire, Michael(Ince)
Squire, Robin


McKay, Allen (Penistone)
Tinn, James


McWilliam, John
Wells, Bowen


Morgan, Geraint
Wheeler, John


Morris, Rt Hon A. (W'shawe)
Whitlock, William


Morris, Rt Hon C. (O'shaw)
Winterton, Nicholas


Ogden, Eric



Palmer, Arthur
Tellers for the Ayes:


Parker, John
Mrs. Gwyneth Dunwoody and


Pendry, Tom
Mr. Michael English


NOES


Aitken, Jonathan
Gummer, JohnSelwyn


Alton, David
Haselhurst, Alan


Arnold, Tom
Havers, Rt Hon Sir Michael


Atkins, Rt Hon H.(S'thorne)
Hayhoe, Barney


Atkinson, David(B'm'th,E)
Henderson, Barry


Baker, Kenneth(St.M'bone)
Heseltine, Rt Hon Michael


Beaumont-Dark, Anthony
Hooson, Tom


Benyon, Thomas(A'don)
Howe, Rt Hon Sir Geoffrey


Berry, Hon Anthony
Howell, Rt Hon D. (G'ldf'd)


Biffen, Rt Hon John
Hunt, David (Wirral)


Blaker, Peter
Jopling, Rt Hon Michael


Boyson, Dr Rhodes
Joseph, Rt Hon Sir Keith


Brittan, Leon
Lamont, Norman


Brooke, Hon Peter
Lawrence, Ivan


Bruce-Gardyne, John
Lawson, Rt Hon Nigel


Bryan, Sir Paul
LeMarchant, Spencer


Buchanan-Smith, Alick
Lester jim (Beeston)


Budgen, Nick
Luce, Richard


Carlisle, Kenneth (Lincoln)
Lyell, Nicholas


Carlisle, Rt Hon M. (R'c'n)
Macfarlane, Neil


Chalker, Mrs. Lynda
MacGregor, John


Channon, Rt. Hon. Paul
McNair-Wilson, M.(N'bury)


Clarke, Kenneth (Rushcliffe)
Major, John


Dean, Paul (North Somerset)
Marshall Michael(Arundel)


Douglas-Hamilton, LordJ.
Mather, Carol


Edwards, Rt Hon N. (P'broke)
Mayhew, Patrick


Emery, Peter
Mellor, David


Fairgrieve, Russell
Miller, Hal(B'grove)


Finsberg, Geoffrey
Mitchell, David (Basingstoke)


Fletcher-Cooke, Sir Charles
Moate, Roger


Forman, Nigel
Monro, Hector


Fowler, Rt Hon Norman
Moore, John


Garel-Jones, Tristan
Morris, M. (N'hamptonS)


Goodlad, Alastair
Morrison, Hon P. (Chester)


Gow, Ian
Nelson, Anthony


Grist, Ian
Neubert, Michael



Newton, Tony
Spicer, Michael (SWorcs)


Nott, Rt Hon John
Stanbrook, lvor


Oppenheim, Rt Hon Mrs S.
Stanley, John


Page, Rt Hon Sir G. (Crosby)
Steel, Rt Hon David


Patten, Christopher(Bath)
Stewart, Ian (Hitchin)


Patten, John(Oxford)
Stradling Thomas, J.


Penhaligon, David
Tebbit, Norman


Percival, Sir Ian
Temple-Morris, Peter


Pym, Rt Hon Francis
Thatcher, Rt Hon Mrs M.


Raison, Timothy
Thompson, Donald


Rathbone, Tim
Thorne, Neil (llford South)


Rees, Peter (Dover and Deal)
Townend,John(Bridlington)


Renton, Tim
Townsend, Cyril D,(B'heath)


Rhodes James, Robert
Vaughan, Dr Gerard


Rhys Williams, Sir Brandon
Viggers, Peter


Ridley, Hon Nicholas
Waddington, David


Rifkind, Malcolm
Wakeham, John


Roberts, M. (Cardiff NW)
Waller, Gary


Roberts, Wyn (Conway)
Warren, Kenneth


Rossi, Hugh
Wiggin, Jerry


Sainsbury, HonTimothy
Young, Sir George(Acton)


Shaw, Giles (Pudsey)
Younger, Rt Hon George


Shaw, Michael (Scarborough)



Silvester, Fred
Tellers for the Noes:


Sims, Roger
Mr. John Cope and


Speed, Keith
Mr. Robert Boscawen.


Speller, Tony

Question accordingly negatived.

Main Question put and agreed to.

Resolved,

That, in the opinion of this House, the ordinary salary of every Member in respect of service on and after 13 June 1980 should be regarded for pension purposes as being at the rate of £13,150.

Orders of the Day — MEMBERS' PENSIONABLE SALARY

Queen's Recommendation having been signified—

Resolved,

That the ordinary salary of every Member in respect of service on and after 13 June 1980 shall be regarded for pension purposes as being at the rate of £13,150.—[Mr. Pym.]

Orders of the Day — MEMBERS' SALARIES

Ordered,

That a select committee be appointed to give further consideration to the desirability and possible method of conducting reviews of Members' salaries by an independent body once during the first Session of each Parliament and of adjusting such salaries during the periods between such reviews by reference to increases in the remuneration of a designated group of outside occupations, and to make recommendations to the House.—[Mr. Pym.]

Orders of the Day — MEMBERS' PENSIONS

Motion made, and Question proposed.

That, in the opinion of this House, the annual amount of a Member's pension should continue to be one-sixtieth of relevant terminal salary for each year of reckonable service, and that Members should have a new option of limited duration to purchase additional reckonable service by lump sum, or by fixed instalments payable as a deduction from salary over a period of five years.—[Mr. Pym.]

Amendment proposed, leave out
continue to be one-sixtieth
and insert
be one-fortieth"—[Mr. Charles R. Morris.]

Question put, That the amendment be made:

The House divided; Ayes 49, Noes 120.

Division No. 79]
[10.52 pm


AYES


Alton, David
Bottomley, Peter (W'wichW)


Beith, A. J.
Campbell-Savours, Dale


Bell, Sir Ronald
Cohen, Stanley


Benyon, Thomas(A'don)
Crowther, J.S.






Cryer, Bob
Morgan, Geraint


Cunningham,G.(lslingtonS)
Morris, Rt Hon A. (W'shawe)


Dalyell, Tam
Morris, Rt Hon C. (O'shaw)


Dubs, Alfred
Morris, M. (N'hamptonS)


Emery, Peter
Ogden, Eric


Fletcher-Cooke, Sir Charles
Palmer, Arthur


Gardner, Edward (SFylde)
Parker, John


Garrett, W. E. (Wallsend)
Pendry, Tom


Greenway, Harry
Penhaligon, David


Hamilton, W.W. (C'tral Fife)
Ross, Stephen (Isle of Wight)


Harrison, Rt Hon Walter
Shersby, Michael


Haynes, Frank
Soley, Clive


Hooley, Frank
Steel, Rt Hon David


Kilfedder, James A.
Tinn, James


Lamond, James
Wheeler, John


Leadbitter, Ted
Whitlock, William


Leighton, Ronald
Willey, Rt Hon Frederick


McDonald, DrOonagh
Winterton, Nicholas


McGuire, Michael (Ince)



McKay,Allen(Penistone)
Tellers for the Ayes:


McWilliam, John
Mrs. Gwyneth Dunwoody and


Marlow, Tony
Mr. Michael English.


NOES


Aitken, Jonathan
Lyell, Nicholas


Arnold, Tom
Macfarlane, Neil


Atkins, Rt Hon H.(S'thorne)
MacGregor, John


Atkinson, David (B'm' th,E)
McNair-Wilson, (N'bury)


Baker, Kenneth (St.M'bone)
Major, John


Beaumont-Dark, Anthony
Marshall Michael (Arundel)


Benyon, Thomas (A'don)
Mayhew, Patrick


Berry, Hon Anthony
Mellor, David


Best, Keith
Miller,Hal (B'grove)


Biffen, Rt Hon John
Mitchell, David (Basingstock)


Blaker, Peter
Moate, Roger


Boscawen, Hon Robert
Monro, Hector


Boyson, Dr Rhodes
Moore, John


Brittan, Leon
Morrison, Hon C. (Devizes)


Brooke, Hon Peter
Morrison, Hon P. (Chester)


Bruce-Gardyne, John
Nelson, Anthony


Bryan, Sir Paul
Neubert, Michael


Buchanan-Smith, Alick
Newton, Tony


Budgen, Nick
Nott, Rt Hon John


Carlisle, Kenneth (Lincoln)
Oppenheim, Rt Hon Mrs S.


Carlisle, Rt Hon M. (R'c'n)
Page, Rt Hon Sir G. (Crosby)


Chalker, Mrs. Lynda
Patten, Christopher (Bath)


Channon, Rt. Hon. Paul
Patten, John(Oxford)


Clarke, Kenneth (Rushcliffe)
Percival, Sir Ian


Cope, John
Pym, Rt Hon Francis


Dean, Paul (North Somerset)
Raison, Timothy


du Cann, Rt Hon Edward
Rathbone, Tim


Edwards, Rt Hon N. (P'broke)
Rees, Peter (Dover and Deal)


Eggar, Tim
Renton, Tim


Fairgrieve, Russell
Rhodes James, Robert


Finsberg, Geoffrey
Rhys Williams, Sir Brandon


Fisher, Sir Nigel
Ridley, Hon Nicholas


Forman, Nigel
Rifkind, Malcolm


Fowler, Rt Hon Norman
Roberts, M. (Cardiff NW)


Garel-Jones, Tristan
Roberts, Wyn (Conway)


Goodlad, Alastair
Rossi, Hugh


Gow, Ian
Sainsbury, Hon Timothy


Grist, Ian
Shaw, Giles (Pudsey)


Gummer, John Selwyn
Shaw, Michael (Scarborough)


Haselhurst, Alan
Silvester, Fred


Havers, Rt Hon Sir Michael
Sims, Roger


Hayhoe, Barney
Speed, Keith


Henderson, Barry
Speller, Tony


Heseltine, Rt Hon Michael
Spicer, Michael (S Worcs)


Hooson, Tom
Squire, Robin


Howe, Rt Hon Sir Geoffrey
Stanbrook, lvor


Howell, Rt Hon D. (G'ldf'd)
Stanley, John


Hunt, David (Wirral)
Stewart, lan(Hitchin)


Jopling, Rt Hon Michael
Stradling Thomas.J.


Joseph, Rt Hon Sir Keith
Tebbit, Norman


Lamont, Norman
Temple-Morris, Peter


Lawrence, Ivan
Thatcher, Rt Hon Mrs M.


Lawson, Rt Hon Nigel
Thompson, Donald


LeMarchant, Spencer
Thorne, Neil(llford South)


LesterJim (Beeston)
Townend, John(Bridlington)


Luce, Richard
Townsend, Cyril D,(B'heath)





Vaughan, DrGerard
Young, Sir George (Acton)


Viggers, Peter
Younger, Rt Hon George


Waddington, David



Wakeham, john
Tellers for the Noes:


Waller, Gary
Lord James Douglas-Hamilto


Wiggin, Jerry
and Mr. Carol Mather.

Question accordingly negatived

Main Question put and agreed to.

Resolved,

That, in the opinion of this House, the annual amount of a Member's pension should continue to be one-sixtieth of relevant terminal salary for each year of reckonable service, and that Members should have a new option of limited duration to purchase additional reckonable service by lump sum, or by fixed instalments payable as a deduction from salary over a period of five years.

Orders of the Day — Statutory Instruments, &c.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): In order to save the time of the House I intend to put together the Questions on the Statutory Instruments.

Motion made, and Question put forthwith pursuant to Standing Order No. 73 A (Standing Committee on Statutory Instruments, &amp;c.)

AIRCRAFT AND SHIPBUILDING INDUSTRIES

That the draft Shipbuilding (Redundancy Payments Scheme) (Great Britain) (Amendment) Order 1981, which was laid before this House on 19th January, be approved.

That the draft Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) (Amendment) Order 1981, which was laid before this House on 20th January, be approved.—[Mr. Thompson.]

Question agreed to.

Orders of the Day — Police (Kent)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]

Mr. Jonathan Aitken: I am grateful for this opportunity to raise on the Adjournment the question of reductions in the Kent police budget for 1981 and 1982. I am especially grateful to my hon. and learned Friend the Minister of State for being present to reply to the debate. By a fortunate coincidence my hon. and learned Friend is a Member for a Kent constituency and so he, too, will have some local knowledge of the subject in addition to his ministerial wisdom.
In initiating a parliamentary deb te on this subject it is appropriate to begin with a tribute to the Kent police. Under the leadership of an exceptionally able chief constable, Mr.Barry Pain, they serve our large and widely spread community efficiently, effectively, fairly and at times courageously. There is no need for me to expand on the theme except to say that those of us who live and work in Kent are proud of our police and grateful for the difficult and demanding job that they do so well.
It is well known that during the past few months there have been one or two rumbles of discontent in the county about the expenditure cuts in the Kent police budget. There have been moments when the rumbles of discontent have come perilously close to erupting into a storm of protest. However, thanks to a degree of good sense and restraint among the principal protagonists, this has been avoided. Nevertheless, some public anxiety exists. Perhaps it has been generated by newspaper publicity, no


doubt always over done. At the end of the day it seems that one or two wires have been getting crossed between Whitehall, county hall, and county police headquarters. I take the view that this short debate may help to uncross some of the wires and clear the air. It is in that spirit that I try to give a factual record of the present situation.
In 1980, at the request of the Kent county council, the Kent police made expenditure cuts of £350,000 a year. They did that by implementing some mileage restrictions, training reductions, cutbacks in police dog provision and other in-house economies. These good housekeeping measures indicated that the Kent police were entering into the spirit of co-operating in the national interest in overall expenditure reductions. Some of these money-saving measures may have contributed to some policing improvements. For example, I think that the mileage restrictions led to more policemen in uniform being put on the beat. I know that that was welcomed in many village communities in the county.
Having made the 1980 cuts, the chief constable expressed the view at that time that those savings had removed all the so-called fat in the police budget and that any further cuts could be cuts into the bone and muscle of police operational efficiency. Despite that warning the police were asked by the Kent county council later in 1980 to prepare to make more cuts in their 1981 budget, and by more cuts it transpired that the county council meant a cut of 3 per cent., or a further £1·2 million per year.
Those cuts, which were finally ratified at a meeting of the county council in Maidstone this morning, are a much more serious matter. As most of them have been implemented since 1 January, it is possible to make a fairly accurate judgment as to their consequences. Among the £1·2 million worth of cuts the following major items stand out. First, there has been a £250,000 cut in the expenditure on police cadets. This effectively means the total abolition of the Kent police cadet intake for the future. Secondly, there has been a £390,000 cut in expenditure on traffic wardens and civilians who work for the police. Thirdly, there has been a £280,000 cut in police overtime.
I regard the abolition of the police cadet scheme as a regrettable and short-sighted economy measure, particulary when it comes at a time of so much unemployment among school leavers. Although I recognise that the Kent police could easily find an adequate number of good quality recruits among adult applicants for the force, there was always an element of community service in the police cadet training scheme. That paid a good dividend for the people of Kent by training school leavers to be the good police officers of the future.
No one wanted to abolish the scheme. I know that there was great regret among the leaders of the Kent county council at having to take that decision. I also know that the leader of the Conservative group on the council—the able and dynamic Sir John Grugeon—immediately after that decision had been taken wrote to the Home Secretary asking whether the scheme could be saved by an allocation of funds from the budget of the youth opportunities programme operated by the Manpower Services Commission. That was an eminently sensible suggestion. Surely at a time when the MSC has about £700 million to £800 million to spend on job-creating schemes for youngsters, the Secretary of State for Employment could instruct it to save the Kent police cadet scheme—which

until recently took up to 120 cadets a year—by making a grant from the youth opportunities programme budget of £200,000 to £300,000 a year.
Until his recent and well-deserved promotion, my hon. and learned Friend was a Minister at the Department of Employment. He is the ideal person to bridge the gap between the Home Office and the Department of Employment to determine whether they can look again at the suggestion put forward by Sir John Grugeon to save the Kent police cadet scheme.
I turn to the £390,000 cut in the civilian staff and traffic wardens who support the Kent police. That will be achieved by natural wastage of five civilians and one and a half traffic wardens each month. That sounds an acceptable level of reduction, until one realises that it means that those civilian jobs will have to be filled by policemen and policewomen at rates of pay that are about double those of civilian clerical staff. I can illustrate that point by taking an example from my constituency. In Broadstairs there is an efficient police process unit that prepares the summonses and paperwork for court cases. As is the normal pattern in each division of the police force in Kent, it is staffed by a chief inspector, one other police officer, and a number of civilian support staff.
Within the next few months that natural wastage will remove at least one, possibly two or three, of the civilian support staff. They will have to be replaced by police officers. If they are not replaced, the backlog, delays and inefficiencies that will affect court hearings will rise to an unacceptable level. The police officers who replace the clerical staff will have to earn their current salaries of about £7,000 a year. They will replace clerical civilians who earn about £3,000 to £3,500 a year. Those figures alone show that it is a false economy. I ask my hon. and learned Friend to look again at the position, not least because the decisions will be in conflict with instructions issued in past Home Office circulars.
I wish to refer briefly to the overtime reduction of £280,000 a year. I only wish to point out that the Kent police are already having their good nature and high sense of responsibility for public service trespassed upon by previous overtime reductions. In the last nine months of 1980 Kent CID officers worked overtime worth £72,000, for which they made no claim. It is a tribute to their morale and dedication to public service that they made no such claims, but it is not right that that situation should continue indefinitely. The year 1981 might put severe strains on police overtime. We have already seen a mercifully shortlived strike at the Kent coal fields which put police on 12-hour a day shifts. Later in the year the Open golf tournament will be held at Sandwich. I see that my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) is here, despite his heavy ministerial responsibilities. He knows, as all Kent Members know—and there is a good representation of them in the Chamber—that such special events put a heavy weight on the police in terms of the extra duties that they have to perform, and it is not reasonable to expect them to perform such duties and not claim overtime.
I hope that the Minister of State will take another look at the matter to see whether the overtime reduction plan can be reconsidered, because it can be achieved only at the expense of policing efficiency elsewhere in the county.
So far, I have concentrated on the financial aspects of the cuts, but I wish to draw the Minister's attention to one or two other slightly unsatisfactory political aspects of


issues relating to the cuts. I am unhappy, as are one or two other hon. Members, about the manner in which the Kent police authority's decision-making process on the cuts appears to have been subordinated to the decision-making process of the Kent county council's ruling political caucus.
As the House knows, a police authority is traditionally supposed to be above politics. That independent status is supposed to be guaranteed by the presence on a police authority of a number of magistrates. In Kent the authority comprises one-third magistrates and two-thirds county councillors. On 1 October last year, the Kent police authority had a meeting at which all eight magistrates were present. All of them, together with a majority of the county councillors present, voted against making any of the additional £l·2 million of cuts in the police budget.
But that decision was reversed at a subsequent meeting of the police authority. Prior to that, the chairman of the police authority, the vice-chairman and the chief constable had been summoned to an 8·30 am meeting with certain key county councillors at which it was made clear that an across-the-board 3 per cent. cut was KCC budget policy and had to be complied with, despite all other considerations, even in the case of the police. History shows that it was complied with. I do not wish to make any criticisms of the county council's political leaders who saw it as their duty to make across-the-board economies in the national interest in a difficult year. However, I want the Minister of State to extract an assurance from the KCC that such decision making will not set a precedent for future years. If it becomes accepted that a police authority can lose its independent status, perhaps other political caucuses with an extremist or anti-police outlook or a view that is much less constructive than that of the good men and true of the KCC will begin to tamper with police budgets and even police policy in a way that should not be tolerated.
I should like my hon. and learned Friend the Minister of State to reassure the House and the people of Kent that the 3 per cent. cut in the Kent police budget is not contrary to the overall strategy of Government policy and is nothing more or less than a one-off exception, in a difficult year, to the Government's policy of increasing expenditure on, and generally supporting, the police.
The issue was first raised with me by Mr. J. W. Dorrell of Ramsgate who wrote to me saying that the dispute over the Kent police budget was proving difficult for him and many like him to comprehend. In a letter dated 8 December 1980, he said:
In the Conservative Manifesto a great deal was said about supporting and increasing the support for the forces of law and order. A view fully shared by the great majority of people. But here in Kent there appears to be a reversal of Government policy. For cuts are undoubtedly going to be made in the amount of finance available to the Police in Kent and this will impose terrible problems for the Chief Constable.
There is no doubt in my mind that Mr. Dorrell was making a fair point. He and many other members of the Kent public and, of course, members of the police service themselves need some reassurance from my hon. and learned Friend that Parliament is watching carefully what is happening in Kent and will not allow this disturbance there to continue. I am sure that my hon. and learned Friend will be able to give that reassurance tonight.

The Minister of State, Home Office (Mr. Patrick Mayhew): I very much welcome the opportunity that my hon. Friend the Member for Thanet, East (Mr. Aitken) has given us this evening to consider the police service in Kent and the provision that is being made for it by the Kent county council. As a Member for a Kent constituency with a great admiration for the Kent county constabulary, I have, as my hon. Friend acknowledged, a double interest in this debate. I am grateful to my hon. Friend for the support that he expressed for the Kent constabulary in particular, and I think that all in the House will wish to extend that support to the police service as a whole.
Before dealing with the points raised by my hon. Friend, I think that it would be helpful to take this opportunity to put on record the effects, since this Government took office, of the priority that we have given to the law and order services. As my hon. Friend rightly reminded us, the Government set great store by the maintenance of law and order, with the intention—which has been achieved—of strengthening the forces that secure the maintenance of law and order.
In May 1979 the total strength of the police service in England and Wales stood at 111,493, and many forces had substantial deficiencies. At the end of 1980, the total strength was 117,423—its highest ever—an increase of nearly 6,000. There are now no provincial police forces with seious deficiencies, and most are at full strength.
Over the same period the Kent constabulary increased from 2,730 to 2,871—an increase of 141 officers. It is now at full strength, and I understand that there is a satisfactory waiting list of people who want to join. I understand from the chief constable that he is now able to choose from adult candidates in recruiting to an extent that has not been the case for a long time.
Our determination to ensure a strong police service is combined with our commitment to ensure that the most effective use is made of public sector resources. In these days of resource restraint, chief constables and their police authorities are well aware of this, I know. The Government want to continue to provide as far as practicable for the strengthening of the law and order services. I am sure that this reflects the wishes of the community. I know I am sure that this reflects the wishes of the community. I know that it is so in Kent.
But we are aware of the problems faced by local authorities at a time when, in order to combat inflation, we as a Government have had to seek reductions in both Government and local authority expenditure. I know that my hon. Friend shares the Government's commitment to that overriding objective—which leads to the defeat of inflation—as well as any other supporter of the Government.
In these circumstances, we recognise that the local authorities and the law and order services cannot be regarded as wholly exempt from the general search for economies. The use of resources everywhere must be subjected to scrutiny to ensure the maximum cost-effectiveness and efficiency.
In all questions of the use of resources a key role, of course, is played by Her Majesty's inspectors of constabulary. They have the duty of advising the Home Secretary on police efficiency. Their regular contact with chief constables, together with their annual inspections, enable them to provide professional advice about police


organisation and methods. This is of direct value to the chief constables and the force, as well as to my right hon. Friend the Home Secretary in fulfilling his statutory duties.
I understand from Her Majesty's chief inspector that the effective use of resources will be a major theme of all inspections this year. This concern is reflected in a wide range of research led by the Home Office on police effectiveness, which is now in progress. It includes projects in patrolling, community policing and preventive policing, crime detection methods and their effectiveness, and the work of traffic divisions.
We must be particularly concerned to ensure that the best use is made of manpower, including civilian staff. Thus it is that before establishment increases are approved my right hon. Friend seeks assurances from police authorities that funds will be available to recruit to the new posts, and that strength will be maintained at a level designed to ensure that police officers are used on duties requiring their skills and training and will not be diverted to duties that could be undertaken at less cost by civilians. Although in some cases this may result in the need to employ additional civilians, the alternative of deploying police officers on clerical duties is clearly undesirable, except as a short-term expedient.
Suitable assurances were sought when my right hon. Friend authorised an increase of 51 posts in the Kent force establishment in the financial year 1979–80, primarily to enable additional officers to be deployed on the beat, where they are most needed. I understand that about 200 police officers have been allocated to the beat as a result of the additional manpower resources that have recently become available. My right hon. Friend received assurances from the police authority that it would maintain the strength of its civilian staff at an appropriate level.
The responsibility for the use of police resources is shared between the police authority, the chief constable and the Home Secretary, and their respective powers and duties are set out in the Police Act 1964. The police authority has the primary responsibility for maintaining an adequate and efficient police force for its area. It is the police authority's rsponsibility to administer the force budget, which it naturally does in liaison with the chief constable.
In doing this, police authorities are obviously in close contact with their county councils, which themselves must decide on the deployment of the resources available to them among the various services within their sphere of responsibility. In each area, the county council's allocation of resources to the police has to take account of both national priorities and local needs, while fulfilling the obligation to maintain an efficient force. Once the county council has concluded, with the police authority, how much can be made available for the police force, it is the responsibility of the police authority and the chief constable to consider how best to allocate the resources and make any savings which may be necessary.
My hon. Friend referred to the reductions that are to be made in the next financial year in the police budget. They include no further intake of cadets; a reduction by natural wastage in civilian and traffic warden strength; reduced spending on goods and services, including a further reduction in petrol consumption; and a reduction in the amount of overtime worked. The financial and other consequences of these reductions will clearly vary.
There is no reason to think that the Kent force has not been faithfully supported by the county council. I am advised that the police authority's share of the county council's total budget increased from 8·8 per cent. in 1975–76 to 11 per cent. in 1979–80. I am also advised that police expenditure between 1975–76 and 1979–80 shows a growth, in real terms, of 8·4 per cent., which compares favourably with 5·3 per cent. for the average of other Kent committees. Where uncovenanted expenditure has arisen from events such as the mass picket—if that is the right word; I am not sure that it is—at Sheerness last year, the cost has been found from the county contingency fund.
My hon. Friend is particularly concerned about the effect of the budget reductions on the police cadets. He has spoken warmly of the police cadets. I endorse what he said about their value. In the past, when recruitment into the police service was not as high as it has been in the past 18 months, the cadet corps provided a useful source of manpower for police forces. Many who entered as cadets have gone on to achieve the highest ranks within the service. But there have been changes in the recruitment situation, in the attitudes of young people of an age to join the cadet corps, and in the greater opportunities they now have for further education. Many forces are finding, without pressure from police authorities, that in present recruiting circumstances they can take advantage of the waiting lists of well-qualified candidates from outside the service and reduce the size of their cadet force.
Without reflecting in any way on the quality of the young people who join the cadets, I am advised that opinion is divided on whether it is possible to generalise as to whether cadets or outside candidates go on to make the best police officers. A police advisory board working party is now studying the whole question—the need for cadets, their value to the service, their recruitment and training—and I hope that its report will provide a sound basis on which informed decisions can be taken on all aspects of the cadet system including, perhaps, any additional way in which it might be financed. I note what my hon. Friend said about the youth opportunities programme.
While the cuts proposed involve a reduction in the amount of overtime worked, I should like to make it clear to the House that in the event of unforeseen commitments, such as a large scale murder inquiry, additional funds would be made available from the county council contingency fund.
As for cuts in civilian staff, we appreciate the need in any large organisation, whether it be local authority or Civil Service, to scrutinise the deployment of manpower carefully to ensure that valuable staff are not being used to fill inessential posts. I should emphasise that the proposed cuts do not involve redundancies but are designed to achieve reduced numbers by natural wastage, that is by not replacing civilian staff who resign or retire. But I should emphasise that we are well aware of the undertaking which the police authority gave, before my right hon. Friend agreed to increase the police officer establishment, to maintain civilian strength at an appropriate level.
I can assure my hon. Friend that the forthcoming annual inspection of the force will provide Her Majesty's inspector of constabulary with the opportunity of assessing the effect of the cuts at first hand, before reporting on the efficiency of the force to my right hon. Friend the Home Secretary. That is the way in which my right hon. Friend


is able to exercise his part in this shared responsibility for the maintenance of proper police efficiency throughout the country.
The arrangements under the Police Act provide for a working partnership in responsibility for the police between the Home Secretary, the police authority and the chief constable. Some of the Home Secretary's responsibility is discharged by himself, some by officials of his Department, and some—a good deal—by Her Majesty's inspector.
My hon. Friend had observations to make about the Kent county council. He varied between describing it as a caucus and as good men and true. From my experience

and from what I have gleaned in my short tenure of the office I hold in the Home Office, I believe that the county council has faithfully supported the Kent constabulary. I have every reason to believe that it will continue to do so. It shares the objectives of my hon. Friend, myself and the Government. My right hon. Friend the Home Secretary is anxious that no falling off shall occur in the efficiency of the police service in Kent. I do not believe that any substantial falling off is to be anticipated.
I am grateful to my hon. Friend for having drawn attention to these matters, and I hope that I have been able to give him some reassurance in my reply.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes to Twelve o'clock.